Here's Why You Should Hold On To Allscripts Stock For Now
Zacks Investment Research | Dec 17, 2019 09:08PM ET
Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) is well poised for growth on the back of strategic acquisitions and divestments, and strong prospects in Sunrise EHR platform. However, integration risks remain a concern.
Shares of Allscripts have lost 7.3%, against the industry ’s growth of 19.3% on a year-to-date basis. However, the stock outpaced the S&P 500 Index’s rally of 26.2%.
The company, with a market capitalization of $1.5 billion, provides information technology (IT) solutions and services to healthcare organizations. It anticipates earnings to improve 10.5% over the next five years. Moreover, it has beat estimates in the trailing four quarters by 5.5%, on average.
Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #3 (Hold).
What’s Weighing on the Stock?
Given the dependence on acquisitions and mergers, the company is significantly susceptible to integration risks.
Moreover, stiff competition in the niche space remains a concern.
Factors to Boost Allscripts
Allscripts continues to benefit from acquisitions and mergers, which in turn will accelerate the company’s overall performance and contribute substantially to the top line.
Moreover, the company continues to gain traction from the prospective Sunrise and Paragon EHR platform — an important growth driver of Allscripts. Notably, Allscripts’ EHR diagnostic tools, including dbMotion, EPSi, FollowMyHealth and 2bPrecise, have been witnessing a growing list of clients outside the company’s EHR base.
Allscripts continues to benefit from its Software, Delivery, Support and Maintenance units, which delivered solid growth in the last couple of quarters. Significant growth in bookings also instills optimism in the stock.
Which Way Are Estimates Headed?
For 2019, the Zacks Consensus Estimate for revenues is pegged at $1.79 billion, indicating a decline of 16.1% from the year-ago period. For adjusted earnings per share, the same stands at 69 cents, suggesting a decline of 4.2% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Conmed Corporation (NASDAQ:CNMD) , West Pharmaceutical Services, Inc. (NYSE:WST) and Edwards Lifesciences Corporation (NYSE:EW) , each currently carrying a Zacks Rank #2 (Buy). You can see .
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Conmed has a long-term earnings growth rate of 17%.
West Pharmaceutical has a long-term earnings growth rate of 14%.
Edwards Lifesciences has a long-term earnings growth rate of 14.8%.
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