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NextGen Rides on Prospects in RCM Space, Competition Rife
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On Sep 24, we issued an updated research report on NextGen Healthcare, Inc. . Solid demand for Revenue Cycle Management (RCM) solutions is likely to provide NextGen with a competitive edge in the MedTech space. However, cutthroat competition in the healthcare information systems and services market is a headwind.
For investors’ notice, on Sep 7, Quality Systems, Inc. had announced that it has changed its corporate name to NextGen.
From Sep 10, the company’s securities started trading under the new symbol, “NXGN”.
Lucrative Prospects in the RCM Space
NextGen is a major player in the U.S. RCM market. The RCM market is currently worth $50 billion in the United States. However, penetration is significantly lower at 20-25%, which presents a significant growth opportunity to NextGen.
The company’s NextGen RCM platform continues to win contracts from healthcare providers. The company scored the highest among all ambulatory vendors for its performance in the following key RCM areas, which include effectiveness of claims processing, patient-facing support performance, efficiency gained by customers, sustainability of pricing and trust as a business partner.
NextGen saw an uptick in deal flow and size inthe RCM segment in the first quarter of fiscal 2019. Revenues in the segment totaled $29.3 million in the quarter, flat year over year.
Cutthroat Competition in the Niche Space
The healthcare information systems and services market is highly competitive. Also, the industry is highly fragmented and includes numerous players.
Per a research by Transparency Market Research, leading players in the Global Healthcare Information Systems Market are Cerner Corporation , McKesson (MCK - Free Report) and many more. Collectively, these players hold a significant share of the global market. Thus, competitors seek to gain market traction by lowering prices or offering services that are better than NextGen.
We are also concerned aboutthe company’s ability to penetrate the Electronic Health Record (EHR) market where it faces competition from low-priced cloud-based EHR models.
Price Performance &Zacks Rank
NextGen underperformed the industry in a month’s time.
Notably, the company’s shares have lost 9.3% compared with the industry's loss of 3.9%. The current level is also lower than the S&P 500 index's gain of 0.8%.The stock has a Zacks Rank #3 (Hold).
NextGen Healthcare, Inc. Price
Which Way are Estimates Treading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at 19 cents, showing a year-over-year decline of 13.7%. The same for revenues is pinned at $134.4 million, reflecting an increase of 1.4% year over year.
For the full year, the Zacks Consensus Estimate for earnings is peggedat 75 cents, showing growth of 7.1% year over year. The same for revenues is pegged at $541.6million, indicating an improvement of 2% year over year.
Key Pick
A better-ranked stock in the broader medical space is athenahealth .
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
NextGen Rides on Prospects in RCM Space, Competition Rife
On Sep 24, we issued an updated research report on NextGen Healthcare, Inc. . Solid demand for Revenue Cycle Management (RCM) solutions is likely to provide NextGen with a competitive edge in the MedTech space. However, cutthroat competition in the healthcare information systems and services market is a headwind.
For investors’ notice, on Sep 7, Quality Systems, Inc. had announced that it has changed its corporate name to NextGen.
From Sep 10, the company’s securities started trading under the new symbol, “NXGN”.
Lucrative Prospects in the RCM Space
NextGen is a major player in the U.S. RCM market. The RCM market is currently worth $50 billion in the United States. However, penetration is significantly lower at 20-25%, which presents a significant growth opportunity to NextGen.
The company’s NextGen RCM platform continues to win contracts from healthcare providers. The company scored the highest among all ambulatory vendors for its performance in the following key RCM areas, which include effectiveness of claims processing, patient-facing support performance, efficiency gained by customers, sustainability of pricing and trust as a business partner.
NextGen saw an uptick in deal flow and size inthe RCM segment in the first quarter of fiscal 2019. Revenues in the segment totaled $29.3 million in the quarter, flat year over year.
Cutthroat Competition in the Niche Space
The healthcare information systems and services market is highly competitive. Also, the industry is highly fragmented and includes numerous players.
Per a research by Transparency Market Research, leading players in the Global Healthcare Information Systems Market are Cerner Corporation , McKesson (MCK - Free Report) and many more. Collectively, these players hold a significant share of the global market. Thus, competitors seek to gain market traction by lowering prices or offering services that are better than NextGen.
We are also concerned aboutthe company’s ability to penetrate the Electronic Health Record (EHR) market where it faces competition from low-priced cloud-based EHR models.
Price Performance &Zacks Rank
NextGen underperformed the industry in a month’s time.
Notably, the company’s shares have lost 9.3% compared with the industry's loss of 3.9%. The current level is also lower than the S&P 500 index's gain of 0.8%.The stock has a Zacks Rank #3 (Hold).
NextGen Healthcare, Inc. Price
Which Way are Estimates Treading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at 19 cents, showing a year-over-year decline of 13.7%. The same for revenues is pinned at $134.4 million, reflecting an increase of 1.4% year over year.
For the full year, the Zacks Consensus Estimate for earnings is peggedat 75 cents, showing growth of 7.1% year over year. The same for revenues is pegged at $541.6million, indicating an improvement of 2% year over year.
Key Pick
A better-ranked stock in the broader medical space is athenahealth .
athenahealth has a long-term expected earnings growth rate of 17.6%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>