Allscripts Received its Third Buy in a Row

By Jason Carr

After UBS and Argus Research assigned a Buy rating to Allscripts in the last month, the company received another Buy, this time from J.P. Morgan. Analyst Stephanie Davis reiterated a Buy rating on Allscripts (NASDAQ: MDRX) yesterday and set a price target of $15. The company’s shares opened today at $10.75, close to its 52-week low of $10.11.

Davis observed:

“Allscripts reported a 3Q miss on weak non-recurring revenue and in-line margins. Bookings came below our estimates ($219M vs. JPMe $316M), driven by timing, weaker than expected Client Services bookings and lower Netsmart contribution ($21M vs. $44M in 2Q). Despite the results and recent peer commentary MDRX was upbeat on the demand environment, citing momentum in the ambulatory and inpatient markets that has been helped by its recent focus on adjacencies vs. EHR replacements. 4Q revenue guidance of $420M-$435M is in line with consensus but implies a strong ramp up in organic growth (~9% at the midpoint vs. 2% YTD), while EPS of $0.14- $0.16 compares to Street of $0.17. We are updating our numbers and conservatively stay at the low end of the top line range given the steep ramp. We reiterate our $15 December 2016 price target and remain Overweight as we believe MDRX’s investments in adjacencies should prove beneficial for the coming leg of cross sales- driven clinical systems growth.”

According to TipRanks.com, Davis is a 1-star analyst with an average return of -5.2% and a 33.3% success rate. Davis covers the Technology sector, focusing on stocks such as Quality Systems, Evolent Health, and Athenahealth.

Currently, the analyst consensus on Allscripts is Moderate Buy and the average price target is $16.50, representing a 53.5% upside.

In a report issued on October 21, Argus Research also reiterated a Buy rating on the stock with a $19 price target.

Allscripts’ market cap is currently $2.16B and has a P/E ratio of 579. The company has a book value ratio of 1.6121.

Based on the recent corporate insider activity of 50 insiders, corporate insider sentiment is negative on the stock. Most recently, in August 2015, James Hewitt, the SVP Development of MDRX sold 70,000 shares for a total of $991,200.

Allscripts Healthcare Solutions, Inc. engages in the provision of clinical, financial, connectivity, information solutions, and related professional services. It operates through Clinical and Financial Solutions, and Population Health segments. The Clinical and Financial Solutions segment involves in the sale of clinical software applications and financial and information solutions. The Population Health segment offers health management and coordinated care solutions. The company was founded in 1986 and is headquartered in Chicago, IL.