A month has gone by since the last earnings report for Allscripts Healthcare Solutions, Inc. (MDRX - Free Report) . Shares have added about 9.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MDRX due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allscripts Healthcare posted first-quarter 2018 adjusted earnings per share of 16 cents per share, missing the Zacks Consensus Estimate by a penny. However, earnings improved from the year-ago figure of 13 cents.
Revenues came in at $519 million, lagging the Zacks Consensus Estimate by 2.3%. However, revenues improved 25% year over year.
In the quarter under review, bookings grew 6.3% to $304 million.
Software delivery, Support and Maintenance
Revenues in this segment totaled $329.8 million, up 23% on a year-over-year basis. Per management, recurring software revenues consisting of subscriptions, recurring transactions, support and new maintenance increased 30%, year over year. A large partof this growth was driven by consolidation of the EIS business.
Revenues in the segment came in at $184.2 million, up 26.8%. Recurring service revenues increased 20% year over year, driven by the addition of EIS, revenue cycle services and other multiyear service offerings.
Gross margin in the first quarter was 47.3%, compared with47.5% in the prior-year quarter.
Total operating expenses was $182 million, up 29% on a year-over-year basis. The rise can be attributed to the EIS business acquisition from McKesson Corporation. Additionally, the company recorded $24 million of legal, transaction-related and other costs in the quarter under review.
Adjusted EBITDA totaled $96 million in the first quarter.
Allscripts exited the quarter with a cash flow of $58 million, compared with$76 million in the year-ago quarter. Free cash flow totaled $17 million, down 37% on a year-over-year basis.
Stock Repurchase Update
Stock repurchases totaled $58 million in the first quarter of 2018.
For 2018, Allscripts anticipates revenues between $2.15 billion and $2.25 billion, up 17-22% from2017. The Zacks Consensus Estimate for 2018 revenues is pegged at $2.2 billion, within the expected range.
Earnings per share areexpected between 72 cents and 82 cents, which reflects an increase of 16-32% year over year. The Zacks Consensus Estimate for earnings is pinned at 77 cents, within the guidedrange.
Adjusted EBITDA is expected in the range of $420-460 million, up 12-23% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to eight lower.
At this time, MDRX has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MDRX has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.