Allscripts Healthcare Solutions, Inc. (MDRX Quick QuoteMDRX - Free Report) has been gaining from strategic alliances over the past few months. A robust fourth-quarter 2021 performance and solid prospects in the Sunrise Electronic Health Record (EHR) platform are expected to contribute further. Yet, concerns related to healthcare regulatory changes and integration risks persist.

Over the past year, this Zacks Rank #2 (Buy) stock has surged 40.8% against a 50.5% fall of the industry it belongs to. The S&P 500 composite has appreciated 13.5% in the said time frame.

The renowned IT solutions and services provider has a market capitalization of $2.51 billion. The company projects 16.3% growth over the next five years and expects to maintain its strong performance. MDRX delivered an average earnings surprise of 64.8% in the past four quarters.

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Let’s delve deeper.

Strategic Alliances: We are optimistic about Allscripts’ partnerships over the past few months. The company, this month, announced an agreement with the U.S. Social Security Administration (“SSA”). The agreement will allow SSA to electronically request and receive health records through the Veradigm Network solution, Veradigm eChart Courier, thereby eliminating the need to allocate time and resources for manual medical record requests.

During the fourth-quarter 2021 earnings call in February, Allscripts inked a deal with Moderna to provide research, consulting and data analytic services for eight separate real-world database studies focused on gaining a better understanding of the impact of different aspects of Moderna's COVID-19 vaccine in the U.S. population.

Potential in Sunrise EHR Platform: We are optimistic about the Sunrise EHR platform, which is an important growth driver for Allscripts. During its fourth-quarter 2021 earnings call in February, Allscripts confirmed that in the United Kingdom, the Medway NHS Foundation Trust has agreed to expand its Allscripts Patient Administration System footprint by deploying Sunrise Clinicals.

Strong Q4 Results: Allscripts’ solid fourth-quarter 2021 earnings buoy optimism in the stock. The year-over-year uptick in the top and bottom lines, and a surge in total bookings during the last reported quarter are impressive. Revenues from both the segments also rose during the quarter, which is encouraging. The launch of Guided Scheduling also raises confidence in the stock. The expansion of margins is another positive.

Downsides

Healthcare Regulatory Changes: Allscripts may be subject to pricing pressures with respect to future sales arising from various sources, including practices of managed care organizations, group purchasing arrangements made through government programs, government action affecting reimbursement levels or any combination thereof under Medicare, Medicaid and other government health programs. The company’s clients and the other entities with which it has business terms are affected by such changes.

Integration Risks: Allscripts’ continued reliance on merger and acquisition activities presents a substantial integration risk. It needs to develop operational synergies from these expansion activities so that they do not turn out to be a waste of resources. The integration of foreign acquisitions presents additional challenges associated with integrating operations across different cultures and languages as well as currency and regulatory risks associated with specific countries.

Estimate Trend

Allscripts is witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 30.5% north to $1.24 per share.

The Zacks Consensus Estimate for the company’s first-quarter 2022 revenues is pegged at $372.8 million, suggesting a 1.2% improvement from the year-ago reported number.

Other Key Picks

Other top-ranked stocks in the broader medical space include Henry Schein, Inc. (HSIC Quick QuoteHSIC - Free Report) , IDEXX Laboratories, Inc. (IDXX Quick QuoteIDXX - Free Report) and AMN Healthcare Services, Inc. (AMN Quick QuoteAMN - Free Report) .

Henry Schein, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, with the average being 25.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has gained 31.6% compared with the industry’s 8.4% growth over the past year.

IDEXX has an estimated long-term growth rate of 13%. IDXX’s earnings surpassed estimates in the trailing four quarters, with the average being 18.6%. It currently carries a Zacks Rank #2.

IDEXX has gained 10.4% against the industry’s 0.7% fall over the past year.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, with the average being 20%. It currently sports a Zacks Rank #1.

AMN Healthcare has gained 37.9% against the industry’s 55.1% fall over the past year.