Allscripts Healthcare Solutions (MDRX) Upgraded From Sell to Hold

Allscripts Healthcare Solutions (MDRX) has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-.
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NEW YORK (TheStreet) -- Allscripts Healthcare Soltns (MDRX) - Get Report has been upgraded by TheStreet Ratings from Sell to Hold with a ratings score of C-.  TheStreet Ratings Team has this to say about their recommendation:

TheStreet Ratings team rates ALLSCRIPTS HEALTHCARE SOLTNS as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLSCRIPTS HEALTHCARE SOLTNS (MDRX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ALLSCRIPTS HEALTHCARE SOLTNS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ALLSCRIPTS HEALTHCARE SOLTNS continued to lose money by earning -$0.37 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($0.46 versus -$0.37).
  • Net operating cash flow has significantly increased by 191.33% to $51.50 million when compared to the same quarter last year. In addition, ALLSCRIPTS HEALTHCARE SOLTNS has also vastly surpassed the industry average cash flow growth rate of 60.98%.
  • The gross profit margin for ALLSCRIPTS HEALTHCARE SOLTNS is rather high; currently it is at 50.60%. Regardless of MDRX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MDRX's net profit margin of -0.64% significantly underperformed when compared to the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Health Care Technology industry average, but is greater than that of the S&P 500. The net income increased by 89.3% when compared to the same quarter one year prior, rising from -$20.62 million to -$2.20 million.
  • MDRX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 31.20%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • You can view the full analysis from the report here: MDRX Ratings Report
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