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Allscripts (MDRX) Up 4.5% Since Q4 Earnings: What's Driving It?

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Shares of Allscripts Healthcare Solutions, Inc. MDRX have rallied 4.5% against the industry's fall of 2.6% since its fourth-quarter 2021 earnings release on Feb 24.

The provider of information technology solutions and services to healthcare organizations has a market capitalization of $2.47 billion. Its earnings for fourth-quarter 2021 surpassed the Zacks Consensus Estimate by 154.8%.

This Zacks Rank #2 (Buy) stock has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.

The rally was largely driven by better-than-expected fourth-quarter 2021 results. Further, the market is upbeat about the company’s new alliances and continued innovation.

Let’s take a quick look at the important catalysts to understand this positive trend.

Key Growth Catalysts

Impressive Q4 Results: The market is upbeat about Allscripts’ better-than-expected results in the fourth quarter of 2021. The year-over-year uptick in the top and the bottom line along with a surge in total bookings during the reported quarter is impressive. Revenues from both the segments also rose during the quarter. In November 2021, Allscripts announced it has been selected by Next Level Urgent Care to improve connectivity, provide better electronic health record workflows and advance analytics to all its locations. Apart from this, the launch of Guided Scheduling raises our confidence in the stock. The expansion of margins is another positive.

New Alliances: Allscripts has entered into a few alliances over the past few months, which looks encouraging. The company, in March, announced an agreement with the U.S. Social Security Administration (SSA). The agreement will allow SSA to electronically request and receive electronic health records through the Veradigm Network solution, Veradigm eChart Courier, thereby eliminating the need to allocate time and resources for manual medical record requests.

During the fourth-quarter 2021 earnings call in February, Allscripts inked a deal with Moderna to provide research, consulting and data analytic services for eight separate real-world database studies focused on gaining a better understanding of the impact of different aspects of Moderna's COVID-19 vaccine in the U.S. population.

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Zacks Investment Research

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Innovation: Allscripts’ portfolio reached various innovation milestones over the past few months. In October, the company announced the launch of Guided Scheduling, the latest addition to its automation features in Allscripts Practice Management. Allscripts’ Guided Scheduling is an AI scheduling application that utilizes real-time provider, practice and industry data to improve patient care and increase healthcare operational efficiencies.

Management at Allscripts confirmed the achievement of innovation milestones in recent times. In care venues, the company’s consumer engagement strategy has at its core an EMR-agnostic patient consumer record. FollowMyHealth helps physicians reach their patients through telehealthcare delivery. This EMR contains all patient medical information, not just data from one EMR company.

Favorable Parameters

Estimates for 2022 and 2023 have moved up nearly 10.6% and 17.7%, respectively, in the past 90 days, reflecting investor optimism.

For first-quarter 2022, Allscripts has an expected earnings growth rate of 21.1%, while revenues are expected to grow 0.2% on a year-over-year basis.

Allscripts has a net margin growth rate of 8.9% compared with the industry’s (39.8%). The stock’s return on equity (ROE) stands at 10.9% versus the industry’s (18.9%).

Other Key Picks

A few other top-ranked stocks in the broader medical space are McKesson Corporation MCK, AMN Healthcare Services, Inc. AMN and Bio-Rad Laboratories, Inc. BIO.

McKesson, carrying a Zacks Rank #2, reported third-quarter fiscal 2022 adjusted earnings per share (EPS) of $6.15, which beat the Zacks Consensus Estimate of $5.38 by 14.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 48.6% compared with the industry’s 9.2% growth in the past year.

AMN Healthcare, carrying a Zacks Rank #1, has a long-term earnings growth rate of 16.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 19.5%, on average.

AMN Healthcare has outperformed its industry over the past year. AMN has gained 33.2% versus the 56.9% industry decline.

Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. It currently has a Zacks Rank #2.

Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in the trailing four quarters, the average surprise being 66.9%.


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