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Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX): Are Analysts Optimistic?

Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Allscripts Healthcare Solutions, Inc., together with its subsidiaries, provides information technology solutions and services to healthcare organizations in the United States, Canada, and internationally. The US$2.3b market-cap company posted a loss in its most recent financial year of US$133m and a latest trailing-twelve-month loss of US$18m shrinking the gap between loss and breakeven. As path to profitability is the topic on Allscripts Healthcare Solutions' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Allscripts Healthcare Solutions

Consensus from 10 of the American Healthcare Services analysts is that Allscripts Healthcare Solutions is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$58m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 17% year-on-year, on average, which seems relatively fair. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Allscripts Healthcare Solutions given that this is a high-level summary, however, keep in mind that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a double-digit growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 26% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Allscripts Healthcare Solutions to cover in one brief article, but the key fundamentals for the company can all be found in one place – Allscripts Healthcare Solutions' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

  1. Valuation: What is Allscripts Healthcare Solutions worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Allscripts Healthcare Solutions is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Allscripts Healthcare Solutions’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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