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Allscripts (MDRX) Q4 Earnings and Revenues Beat Estimates

Allscripts Healthcare Solutions, Inc. MDRX reported fourth-quarter 2020 adjusted earnings per share (EPS) of 29 cents, surpassing the Zacks Consensus Estimate of 22 cents by 31.8%. The bottom line also rose 70.6% on a year-over-year basis.

Full-year adjusted EPS was 76 cents, reflecting a 13.4% increase from the year-ago period. However, the figure surpassed the Zacks Consensus Estimate of 69 cents.

Revenue Details

Revenues in the reported quarter totaled $414.5 million, which surpassed the Zacks Consensus Estimate by 1.9%. However, the top line fell 8.2% year over year.

Full-year revenues were $1.64 billion, down 7.6% from a year ago. The metric also outpaced the Zacks Consensus Estimate by 0.6%.

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise
Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. price-consensus-eps-surprise-chart | Allscripts Healthcare Solutions, Inc. Quote

For fourth-quarter 2020, bookings came in at $220 million, down 29.5% 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 $241.3 million on a reported basis, down 3% from the year-ago quarter's tally.

Client Services

At this segment, revenues totaled $145.1 million, down 12.3% from the year-ago quarter's figure.

Margins

Gross profit in the fourth quarter was $89.11 million, down 0.4% from the year-ago quarter. Gross margin was 45.6%, up 358 basis points (bps) from the year-ago figure.

Adjusted operating profit in the reported quarter was $41 million, up 92%. Adjusted operating margin was 9.9%, an expansion of 515 bps.

Financial Update

The company exited 2020 with cash and cash equivalents of $531.1 million, up from $129.6 million at 2019-end. Long-term debt at the end of 2020 was $167.6 million, down 69.6% from the end of 2019.

At the end of 2020, cumulative net cash used by operating activities totaled $106.7 million against cumulative net cash of $46.3 million provided at the end of the year-ago period.

2021 Guidance

Allscripts announced its outlook for 2021.

For the full year, Allscripts anticipates total revenues of $1.5 billion. The Zacks Consensus Estimate for the same is pegged at $1.54 billion.

The company expects revenues in the range of $365-$385 million per quarter through 2021, with the first quarter closer to the low end of the range. The Zacks Consensus Estimate for first-quarter 2021 revenues is pegged at $381 million.

Free cash flow expectations for 2021 are in the range of $90 million to $100 million.

Summing Up

Allscripts ended the fourth quarter of 2020 on a strong note. The company saw solid momentum in the fourth quarter as Veradigm returned to growth. In ambulatory enterprise, Allscripts continues to see increasing momentum, benefiting from the leading outpatient market share across TouchWorks Professional and practice using electronic health records. Expansion of both margins is a positive. The company completed the sale of both CarePort and EPSi during the fourth quarter.

The company’s fourth-quarter results were impacted by the COVID-19 pandemic. During this uncertain period, Allscripts managed to leverage both new and existing innovative solutions to help clients and boost patient outcomes.

Meanwhile, the company witnessed a decline in its core Client Services and Software delivery unit revenues during the fourth quarter. Also, the company’s bookings declined year over year in the quarter. Moreover, intense competition in the niche space is a concern.

Zacks Rank and Key Picks

Allscripts currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space that have already announced their quarterly results are Abbott Laboratories ABT, AngioDynamics, Inc. ANGO and Hill-Rom Holdings, Inc. HRC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Worldwide sales of $10.7 billion in the quarter outpaced the consensus mark by 7.9%.

AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny against the Zacks Consensus Estimate of a loss per share of 2 cents. Revenues of $72.8 million beat the consensus mark by 8%.

Hill-Rom reported first-quarter fiscal 2021 adjusted EPS of $1.53, beating the Zacks Consensus Estimate by 45.7%. Revenues of $741.1 million surpassed the consensus mark by 13.2%.

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