Allscripts (MDRX) Q2 Earnings & Revenues Surpass Estimates

Allscripts Healthcare Solutions, Inc. MDRX delivered adjusted earnings per share (EPS) of 18 cents in the second quarter of 2022, flat year over year. The figure, however, topped the Zacks Consensus Estimate by 12.5%.

GAAP loss per share for the quarter was 54 cents against the year-earlier EPS of 15 cents.

Revenues in Detail

Allscripts registered revenues of $150.9 million in the second quarter, up 6.9% year over year. The figure surpassed the Zacks Consensus Estimate by 2.3%.

For second-quarter 2022, Veradigm revenues were $144.6 million, up 8.4% from the prior-year period.

Segment Details

In the quarter under review, revenues at the Provider segment amounted to $118.9 million on a reported basis, up 2.6% from the year-ago quarter's tally.

The Payer & Life Sciences segment’s revenues totaled $32 million, up 26.5% from the year-ago quarter's figure.

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. Price, Consensus and EPS Surprise

Allscripts Healthcare Solutions, Inc. price-consensus-eps-surprise-chart | Allscripts Healthcare Solutions, Inc. Quote

Margin Trend

In the quarter under review, Allscripts’ gross profit rose 16.2% to $79.5 million. Gross margin expanded 424 basis points (bps) to 52.7%.

Selling, general & administrative expenses surged 113.2% to $59.9 million. Research and development expenses climbed 9.1% year over year to $22.8 million. Adjusted operating expenses of $82.7 million increased 68.8% year over year.

Adjusted operating loss totaled $3.2 million against the prior-year quarter’s adjusted operating profit of $19.4 million.

Financial Position

Allscripts exited second-quarter 2022 with cash and cash equivalents of $500.2 million compared with $82.8 million at the end of first quarter. Long-term debt at the end of second-quarter 2022 was $199.9 million compared with $377.1 million at the end of first quarter.

Cumulative net cash provided by operating activities - continuing operations at the end of second-quarter 2022 was $76.6 million compared with net cash provided by operating activities - continuing operations of $88.2 million a year ago.

Allscripts repurchased stocks worth $94 million in the second quarter of 2022.

2022 Guidance

Allscripts has reiterated its consolidated revenue growth projection for full-year 2022, which is likely to be up 1-2% from the comparable 2021 figures. The Zacks Consensus Estimate for revenues currently stands at $613.2 million.

The company continues to expect to register year-over-year growth of 6-7% in its Veradigm revenue.

Our Take

Allscripts exited the second quarter of 2022 with better-than-expected results. The year-over-year uptick in the top line during the reported quarter is impressive. Revenues from both segments also rose during the quarter, which is encouraging. During its second-quarter earnings call, Allscripts confirmed that it had inked deals with Spectrum Medical (a current client) OrthoBethesda. The company is also progressing well via its mergers and acquisitions. These developments raise our confidence in the stock. Expansion of gross margin is another positive.

Yet, Allscripts’ exposure to integration risks is worrying. Intense competition in the niche space is also a concern.

Zacks Rank and Key Picks

Allscripts currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, AMN Healthcare Services, Inc. AMN and Zimmer Biomet Holdings, Inc. ZBH.

Quest Diagnostics, carrying a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $2.36, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $2.45 billion outpaced the consensus mark by 7.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quest Diagnostics has an earnings yield of 6.9% compared with the industry’s 3.8%. DGX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 12.1%.

AMN Healthcare, having a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $3.31, which beat the Zacks Consensus Estimate by 11.8%. Revenues of $1.43 billion outpaced the consensus mark by 4.8%.

AMN Healthcare has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed estimates in all the trailing four quarters, the average being 15.7%.

Zimmer Biomet reported second-quarter 2022 adjusted EPS of $1.82, which surpassed the Zacks Consensus Estimate by 11.7%. Second-quarter revenues of $1.78 billion outpaced the Zacks Consensus Estimate by 3.5%. It currently has a Zacks Rank #2.

Zimmer Biomet has an estimated long-term growth rate of 5%. ZBH’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average being 7.4%.

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