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Why Is Nextgen Healthcare (NXGN) Up 17.1% Since Last Earnings Report?

Zacks Equity Research
·3 min read

A month has gone by since the last earnings report for Nextgen Healthcare (NXGN). Shares have added about 17.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Nextgen Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

NextGen Earnings and Revenues Beat Estimates in Q2

NextGen Healthcare, Inc. reported second-quarter adjusted earnings per share  of 30 cents, beating the Zacks Consensus Estimate by 50%.Moreover, the bottom line rose 25% from the prior-year quarter.

Revenue Details

Revenues of this Zacks Rank #2 (Buy) company amounted to $140 million, up 4.2% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 4.9%.

Segment Details

The company reported second-quarter fiscal 2021 revenues under the following segments:

Total Recurring revenues were $125.7 million, up 4.2% from the year-ago quarter.

Meanwhile, total Software, hardware and other non-recurring revenues amounted to $14.3 million, up 4.4% on a year-over-year basis.

Margin

In the quarter under review, gross profit totaled $71.1 million, up 3.7% from the prior-year quarter. Gross margin was 50.8%, down 29 basis points (bps).

Adjusted operating profit came in at $53.4 million, up 9.5% year over year. Adjusted operating margin in the fiscal second quarter was 38.1%, up182 bps.

Fiscal 2021 Guidance

On the back of improvement in market conditions, NextGen is reinstating its annual guidance.

The company projects revenues within the range of $535 to $551 million. The Zacks Consensus Estimate for the same is pegged at $540.5 million.

Adjusted earnings per share is projected within 83-93 cents. The Zacks Consensus Estimate for the same is pegged at 80 cents.

Cash Position

Cash and cash equivalents came in at $103.4 million at the end of the fiscal second quarter, compared with $192.3 million at the end of the fiscal first quarter.

At the end of fiscal second quarter, cumulative net cash flow from operations came in at $30.4 million, compared with $23.8 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Nextgen Healthcare has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Nextgen Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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