NextGen Healthcare (NXGN) Loses 8.8% Despite Q3 Earnings Beat
Shares of NextGen Healthcare, Inc. NXGN fell 8.8% on Jan 28 despite better-than-expected third-quarter fiscal 2021 performance.
The company reported fiscal third-quarter adjusted earnings per share (EPS) of 26 cents, beating the Zacks Consensus Estimate of 24 cents by 8.3%. Moreover, the bottom line improved 13% from the prior-year quarter.
Revenue Details
Revenues amounted to $141.7 million, up 2.9% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 0.6%.
Segment Details
The company reported third-quarter fiscal 2021 revenues under the following segments:
Total Recurring revenues were $128.2 million, up 2.8% from the year-ago quarter.
NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise
NEXTGEN HEALTHCARE, INC price-consensus-eps-surprise-chart | NEXTGEN HEALTHCARE, INC Quote
Meanwhile, total Software, hardware and other non-recurring revenues amounted to $13.5 million, up 4.3% on a year-over-year basis.
Margins
In the quarter under review, gross profit totaled $71.4 million, up 2.6% from the prior-year quarter. Gross margin was 50.4%, down 10 basis points (bps).
Operating profit came in at $0.9 million, down 71.6% year over year.
Operating margin in the fiscal third quarter was 0.7%, up 170 bps.
Cash Position
Cash and cash equivalents were $89.5 million at the end of the fiscal third quarter, compared with $103.4 million at the end of the fiscal second quarter.
At the end of fiscal third quarter, cumulative net cash flow from operations came in at $75.9 million, compared with $64.4 million a year ago.
Fiscal 2021 Guidance
On the back of improvement in market conditions, NextGen Healthcare is reiterating its annual guidance.
The company projects revenues in the range of $547 million to $555 million. The Zacks Consensus Estimate for the same is pegged at $549.6 million.
Adjusted EPS is projected within 92-98 cents. The Zacks Consensus Estimate for the same is pegged at 96 cents.
Summing Up
NextGen Healthcare exited the fiscal third quarter on a strong note. The company benefited from its operating segments in the quarter under review. Expansion in adjusted operating margin is another plus. However, significant contraction in gross margin remains a concern. Additionally, NextGen Healthcare faces intense competition in the MedTech space.
Zacks Rank
NextGen Healthcare currently carries a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks, which are expected to report earnings soon, include Hologic, Inc. HOLX, IDEXX Laboratories, Inc. IDXX and Align Technology, Inc. ALGN.
The Zacks Consensus Estimate for Hologic's first-quarter fiscal 2021 adjusted EPS is pegged at $2.14, indicating a whopping increase of 250.8% from the year-ago quarter. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
IDEXX currently carries a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2020 adjusted EPS currently stands at $1.43, indicating growth of 37.5% from the prior-year quarter. The consensus estimate for revenues is pegged at $677.5 million, suggesting 12.2% increase from the year-ago reported figure.
The Zacks Consensus Estimate for Align Technology’s fourth-quarter 2020 revenues is pegged at $781.9 million, suggesting an improvement of 20.3% from the year-earlier reported figure. The same for EPS stands at $2.13, indicating growth of 39.2% from the year-ago reported figure. The company currently carries a Zacks Rank #2.
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