UPDATE: ISI Group Reiterates Buy Rating, Raises PT on Allscripts Healthcare Solutions on Incremental Positive Data
In a report published Wednesday, ISI Group reiterated its Buy rating on Allscripts Healthcare Solutions (NASDAQ: MDRX), and raised its price target from $10.50 to $14.00.
ISI Group noted, “MDRX reported results that, while somewhat mixed, displayed incremental positive data points that reaffirms our optimistic outlook on the long-term turnaround potential. With regards to bookings, the company delivered ~12% sequential bookings growth, coming in well above worst-case fears and highlighting the early success of the new product roll-out. Within this bookings report, MDRX closed two new Sunrise contracts during the Q, including one expansion of an existing contract (Ambulatory and Sunrise Financial Manager) and one new large integrated delivery network (bundling of new offerings). Additionally, MDRX announced a broad based restructuring plan, including plans to invest $45-50 MM (one-time expenses) in FY13, which the management expects to drive at least $50 MM of annual run-rate savings beginning in FY14 (mgmt expects ~$25 MM of savings in FY13, which will partially offset one-time expenses). While it is still early in the turnaround, the initial steps taken by new CEO Paul Black appear to be positioning MDRX to return to a more normalized growth level. Therefore, we reiterate our Buy rating on MDRX and are increasing our PT from $10.50 to $14.00 (~9x FY14 EBITDA). Customer feedback, and any updates on new product rollouts will be crucial to MDRX's ability to win new business going forward.”
Allscripts Healthcare Solutions closed on Tuesday at $11.18.
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