Quality Systems & Ingram Team Up - Analyst Blog

Recently, Ingram Micro Inc. (IM) and NextGen Healthcare Information Systems, Inc., the wholly-owned subsidiary of Quality Systems, Inc. (QSII), joined forces for the quick adoption of Electronic Healthcare Records (EHR) in the U.S.
 
The NextGen division, headquartered in Horsham, Pennsylvania, and significant locations in Atlanta, Georgia, St. Louis, Missouri and Hunt Valley, Maryland, focuses principally on developing and marketing products and services for medical practices. The unit provides electronic health record and practice management systems, connectivity solutions and revenue cycle management services for hospitals, health systems and physician practices, inclusive of more than 25 medical specialties.
 
The agreement will see Ingram Micro and NextGen Healthcare work together to recruit, train and support new partners focused on providing healthcare information technology solutions. Furthermore, Ingram will provide flexible financing and leasing options aimed at helping solution providers acquire NextGen solutions, increase their margin opportunity and minimize their costs. These progressive financing options should enable channel partners and end-users take advantage of the ARRA (American Recovery and Reinvestment Act) stimulus payments for healthcare IT adoption.
 
This U.S. distribution relationship comprises of NextGen EPM (Enterprise Practice Management), NextGen EHR, NextGen Community Health Solution (CHS), and other solutions provided by NextGen and Quality Systems. The distribution deal complements Ingram’s  ARRA economic stimulus effort within the IMStimulus program apart from enhancing the solutions portfolio offered within Ingram‘s existing IMHealth program. Furthermore, the deal should enable the NextGen division to leverage its distribution network and technology resources to meet the increased demand for certified EHR systems.
 
Currently, our short-term recommendations on Ingram Micro and Quality Systems are different. We advise investors to buy Ingram (Zacks Rank# 1 [Strong Buy]) as it is expected to Outperform the overall U.S. equity market over the next 1-3 months. Our expectation is based on the distinct upward bias of the earnings estimates revisions (over the last 30 days) by the analysts covering the stock for the fourth quarter of 2009 as well as the first quarter of 2010.
 
We advise investors to retain Quality Systems in the short-term (Zacks Rank# 3 (Hold)). Our expectation is based on the roughly equivalent pressure in both directions from analysts covering the stock for the next quarter over the last 30 days. While 5 of the 23 analysts covering the stock for the next quarter have lowered their earnings estimates over the last 30 days, 4 have moved in the opposite direction. Furthermore, the magnitude of the revisions is negligible. As a result of the lack of strength and magnitude of the revisions our short-term recommendation on the stock is Hold.
 
We have similar long-term recommendations on both the stocks. We are Neutral on both of them as they are expected to perform in-line with the overall U.S. equity market over the next 6-12 months.
Read the full analyst report on "QSII"
Read the full analyst report on "IM"
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