Interactive Buyside Community Rates CPSI a BUY with $62 Target
The following is an Interactive Buyside research thesis summary, published by our independent buyside analyst community. To access the below full research report for free, click here and unlock the CPSI report.
Computer Programs and Systems (CPSI) passes our 3-M’s test with flying colors. This is a great business and we hardly could have been more impressed with our conversation with CFO David Dye. They have a niche in an industry that is growing nicely with near-term catalysts. A nice dividend, insider buying, strong moat, and relative value our all positives. CPSI has grown top-line revenues at greater than 12% in the last three years. This is likely to accelerate due to legislative catalysts and the recent launch of its subsidiary TruBridge, yet valuation multiples are below historical levels and that of peers.
- Recurring revenues represent 60-65% of CPSI’s top line. This recurring revenue is from support and maintenance, and business management services.
- ROE (Return on Equity) for 2012 was over 50% and the 10 year average has been almost 40%.
- CSPI sales and earnings are growing at almost 9% and 15% annually.
- The dividend has been growing at a healthy rate; the 2013 dividend was increased 11%.
- Strong balance sheet with virtually no long term debt.
- The backlog is almost $150 million.
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