U.S. Markets closed

NextGen (NXGN) Earnings and Revenues Beat Estimates in Q3

Zacks Equity Research

NextGen Healthcare, Inc. NXGN reported third-quarter fiscal 2020 adjusted earnings per share (EPS) of 23 cents, beating the Zacks Consensus Estimate of 20 cents. The metric rose 15% from the year-ago quarter’s figure.

 

Revenues of this Zacks Rank #4 (Sell) company totaled $137.7 million, up 5.3% year over year. However, the figure surpassed the Zacks Consensus Estimate by 1.9%.

 

Bookings Update

 

Bookings for the quarter came in at $30.6 million, down 6.7% from the year-ago quarter’s figure, primarily due to change in sales organization.

NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise

 

NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise

NEXTGEN HEALTHCARE, INC price-consensus-eps-surprise-chart | NEXTGEN HEALTHCARE, INC Quote

Segment Details

 

The company reported third-quarter fiscal 2020 revenues under the following segments:

 

Total Recurring revenues grossed $124.8 million, up 6.3% from the year-ago quarter.

 

Meanwhile, total Software, hardware and other non-recurring revenues came in at $13 million, down 0.3% on a year-over-year basis. Per management, this reflects headwinds in the managed services and software areas.

 

Margin

 

In the quarter under review, gross profit totaled $69.6 million, up 0.6% from the prior-year quarter’s tally. Gross margin was 50.5%, down 240 basis points (bps).

 

Operating income in the fiscal third quarter was $3.3 million, significantly down from the year-ago quarter’s $6.2 million. Operating margin, as a percentage of revenues, was 2.4%, down 230 bps.

 

Fiscal 2020 View Updated

 

For fiscal 2020, NextGen expects revenues between $541 million and $547 million, narrower than the earlier communicated range of $536-$550 million. The mid-point of the range, $544 million, is above the same for the previous range, $543 million. The Zacks Consensus Estimate for revenues is pegged at $542 million.

 

Full-year EPS is expected between 80 cents and 84 cents. The mid-point of 82 cents lies slightly below the Zacks Consensus Estimate which is pegged at 83 cents.

 

Summing Up

 

NextGen gained from its Recurring segment in the quarter under review. Impressive client addition and an impressive fiscal 2020 outlook instil optimism. Meanwhile, NextGen’s Software, hardware and other non-recurring revenues were soft in the quarter. Bookings also declined in the quarter. Significant contraction in gross and operating margins raises concern. Additionally, NextGen faces stiff rivalry in the MedTech space.

 

Key Picks

 

Some better-ranked stocks in the broader medical space are Cerner Corporation CERN, DexCom DXCM and HealthEquity HQY, each carrying a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

The Zacks Consensus Estimate for Cerner’s fourth-quarter revenues is pegged at $1.43 billion, suggesting a year-over-year increase of 5%. The same for EPS stands at 74 cents, indicating a year-over-year upside of 17.5%.

 

The Zacks Consensus Estimate for DexCom’s fourth-quarter revenues is pinned at $457 million, calling for a year-over-year increase of 35.2%. The same for EPS stands at 72 cents, hinting at year-over-year growth of 33.3%.

 

The Zacks Consensus Estimate for HealthEquity’s fiscal fourth-quarter revenues is pegged at $193.6 million, calling for a year-over-year increase of 155.5%. The same for EPS stands at 19 cents.

 

Zacks Top 10 Stocks for 2020

 

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

 

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cerner Corporation (CERN) : Free Stock Analysis Report
 
DexCom, Inc. (DXCM) : Free Stock Analysis Report
 
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
 
NEXTGEN HEALTHCARE, INC (NXGN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research