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UPDATE: Morgan Stanley Reiterates On Allscripts Healthcare Solutions Following Solid Bookings Performance

Dwight Einhorn

In a report published Friday, Morgan Stanley analyst Ricky R. Goldwasser reiterated an Overweight rating on Allscripts Healthcare Solutions (NASDAQ: MDRX), but removed the $21.00 price target.

In the report, Morgan Stanley noted, “1Q14 bookings of $223M were up 25.5% y/y, with -18.6% seq decline reflecting seasonality (CERN was down -17.8% seq). Growth y/y reflected strength in ambulatory, population health management (PHM), managed IT services and outsourcing. PHM accounted for 36% of bookings; ex-PHM we est. core bookings were up 4.3% y/y and down -10.2% seq. MDRX added 130 new clients in the qtr, with ambulatory and PHM (particularly Care Management) driving new wins.

"SaaS contracts were 42% of bookings, up from 25% in 1Q13 and inline with 44% in 4Q13. SaaS revenues were 15% of total revenues up from 13% in 1Q13 and 14% in 4Q13. Driven by increasing SaaS mix, recurring revenues were 78% in the qtr, up from 74% in both 1Q13 and 4Q13.”

Allscripts Healthcare Solutions closed on Thursday at $14.99.

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