AllScripts (MDRX) Up 18.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for AllScripts Healthcare (MDRX). Shares have added about 18.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AllScripts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Allscripts Q2 Earnings and Revenues Beat Estimates
Allscripts Healthcare Solutions reported second-quarter 2020 adjusted earnings per share of 18 cents, which beat the Zacks Consensus Estimate of 12 cents by 50%. The bottom line also rose 5.9% on a year-over-year basis.
Revenue Details
Revenues totaled $406.2 million, which beat the Zacks Consensus Estimate by 1.6%. However, the top line fell 8.8% year over year.
For second-quarter 2020, bookings came in at $188 million, down 31.9% from the prior-year quarter.
Segment Details
The Provider segment consists of core integrated clinical software applications, financial management and patient engagement solutions targeted at clients across the entire continuum of care. Meanwhile, the new Veradigm segment primarily focuses on the payer and life sciences market.
Software delivery, Support and Maintenance
In the quarter under review, revenues at the segment amounted to $256 million on a reported basis, down 10.2% from the year-ago quarter's tally.
Client Services
At this segment, revenues totaled $150.2 million, down 5.8% from the year-ago quarter's figure.
Margins
Gross profit in the second quarter was $164.4 million, down 10.7% from the year-ago quarter. Gross margin was 40.5%, down 94 basis points (bps) from the year-ago figure.
Adjusted operating profit in the reported quarter was $2 million, down 89.4%. Adjusted operating margin was 0.4%, a contraction of 300 bps.
Financial Update
The company exited the second quarter of 2020 with cash and cash equivalents totaled $199 million, down from $204.3 million at the end of first quarter.
At the end of the second quarter, cumulative net cash provided by operating activities totaled $19 million against cumulative net cash used of $1.9 million at the end of the year-ago period.
2020 Guidance
Allscripts did not provide any quarterly or full-year 2020 guidance.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 14.02% due to these changes.
VGM Scores
At this time, AllScripts has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AllScripts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Allscripts Healthcare Solutions, Inc. (MDRX) : Free Stock Analysis Report
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