Argus reiterated its Buy rating on Allscripts Healthcare Solutions Inc MDRX with a $19 target price as it believes new orders will translate into higher revenue over the next 12–18 months.
“In particular, we are encouraged by the continuing trend of new orders growing faster than revenue, which provides good visibility for future revenue streams,” analyst David Toung wrote in a note.
In the second quarter, the company’s orders grew 39 percent to $369 million, increasing backlog by 12.5 percent to $3.976 billion. Toung noted that the company posted its sixth straight quarter of new order growth in the quarter. Both new orders and backlog grew faster than revenue growth of 10 percent.
“When Allscripts reports 3Q16 results on November 3, we will be looking for an update on the company’s progress in converting orders to revenue,” Toung noted.
Allscripts reaffirmed its financial guidance for 2016. It continues to expect adjusted EPS of $0.55–$0.62. The analyst reiterated his adjusted EPS estimates of $0.62 for 2016 and $0.70 for 2017.
At the time of writing, shares of Allscripts slipped 3.74 percent to $12.35.
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