With a market capitalization of approximately $2.51 billion, Allscripts Healthcare Solutions Inc. MDRX is likely to gain from higher adoption of Electronic Health Record (EHR) solutions, particularly the Sunrise EHR platform. However, intense competition in the MedTech space is a headwind.
The stock has a Zacks Rank #3 (Hold). Here we take a quick look at the primary factors that have been plaguing Allscripts and discuss the prospects that ensure the stock's near-term recovery.
Which Way Are Estimates Treading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at 19 cents, reflecting an increase of 18.8% on a year-over-year basis. The same for revenues is pegged at $545.9 million, showing an increase of 30% year over year.
For 2018, the Zacks Consensus Estimate for revenues is pinned at $2.17 billion, reflecting a rise of 18% year over year. However, the same for earnings is pegged at 75 cents, showing growth of 21% year over year.
Allscripts Healthcare Solutions, Inc. Price and Consensus
Allscripts Healthcare Solutions, Inc. Price and Consensus | Allscripts Healthcare Solutions, Inc. Quote
Why Should You Retain Allscripts?
We believe that the Sunrise EHR platform is an important growth driver for Allscripts. The company is gaining popularity among hospitals and healthcare systems on the back of the platform with increased sales to new domestic and international clients.
In September, NY-based Wyckoff Heights Medical Center selected the Sunrise Abstracting solution. For investors’ notice, Wyckoff Heights offers outpatient services, health education and screening programs at community ambulatory care centers (read more: Allscripts' Sunrise Abstracting Selected by Wyckoff Heights).
Of other recent developments in the platform, Catholic Medical Center recently announced that it has expanded its portfolio of Allscripts solutions. This was a multi-year expansionary move signed in 2017. Catholic Medical Center is expected to add integrated suite of Sunrise solutions that includes Sunrise Ambulatory Care, Sunrise Emergency Care, Sunrise Surgical Care, Sunrise Radiology, Sunrise Financial Manager, Sunrise Enterprise Registration and Scheduling, Sunrise Critical Care, Sunrise Mobile MD as well as Sunrise Mobile Care.
Moreover, in the EHR front, Allscripts saw several developments in the second quarter. Genesys, a part of Ascension, invested in the company’s 2bPrecise solution. Furthermore, Grants Pass, an existing EHR client of the company, adopted Allscripts PM along with revenue cycle management (RCM) services.
What's Deterring the Stock?
Larger players like Cerner CERN and McKesson MCK have been gaining prominence in the U.S. MedTech industry owing to their cost effective EHR profile that serves inpatient and outpatient segments. Moreover, the market is price sensitive, particularly on the lower end.
In the past year, shares of Allscripts lost 0.8%, against the industry's increase of 1%. The performance is also unfavorable compared with S&P 500's return of 16.7%.
Want More from the MedTech Space?
A better-ranked stock in the broader medical space is athenahealth ATHN.
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.
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