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Here's Why You Should Retain NextGen (NXGN) Stock for Now
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NextGen Healthcare, Inc. is well-poised for growth, courtesy of its solid product portfolio. The optimism, led by solid third-quarter fiscal 2023 performance, along with continued demand for its solutions, is expected to contribute further. However, stiff competition and NextGen’s dependence on third-party partners pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 10.9% compared with the industry’s 32.3% decline. The S&P 500 Index has gained 3.8% during the same time frame.
This renowned global provider of innovative and cloud-based healthcare technology solutions has a market capitalization of $1.17 billion. It projects 13.9% growth for fiscal 2024 and expects to maintain a strong performance.
NXGN’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 0.5%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Product Portfolio: We are optimistic about NextGen’s innovative cloud-based healthcare technology solutions that empower healthcare practices. Its portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, including consumerism, digitization, risk allocation, regulatory influence and integrated care and health equity.
Solid Demand for NextGen Solutions: NextGen benefits from strong demand for its services that include Hospitals, EHR and PM. Its Inpatient Clinicals, Lab and Patient Portal EHR solutions have also been gaining considerable traction.
Last month, the company announced that its NextGen Behavioral Health Suite was chosen by the Compass Health Network for providing whole-person care.
Strong Q3 Results: NXGN’s solid third-quarter fiscal 2023 results, including the year-over-year top-line uptick, buoy optimism. Strength in Recurring revenues as well as robust increases in Subscription services, Managed services, and Transactional and data services revenues looks encouraging. The buyout of TSI Healthcare and improvement in Other non-recurring services revenues are also promising.
Downsides
Dependence on Third-Party Partners: NXGN is subject to several risks associated with having a portion of its assets and operations in India, and using third-party service providers in India and other countries. Various factors, such as changes in the current government of India could affect the nation’s economic liberalization and deregulation policies. These might also disrupt India’s business and economic conditions, and NextGen’s business in particular.
Stiff Competition: The markets for healthcare information systems are intensely competitive and NXGN faces significant competition from various sources. While many of its competitors have substantially better resources, the larger ones have greater scale than NextGen. Transaction-induced pressure or other related factors may cause price erosion and other negative market dynamics that could adversely affect the company’s business.
Estimate Trend
NextGen is witnessing a stable estimate revision trend for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has remained steady at 96 cents.
The consensus mark for the company’s fourth-quarter fiscal 2023 revenues stands at $170.6 million, indicating a 12.8% improvement from the year-ago quarter’s reported number.
Our fourth-quarter revenue estimates stand at $170.9 million, indicating a 13% increase from the prior-year quarter’s reported figure.
Some better-ranked stocks from the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , Henry Schein (HSIC - Free Report) and The Cooper Companies (COO - Free Report) .
Becton, Dickinson and Company has an estimated long-term growth of 7.8%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.47%. Currently, BDX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s shares have gained 0.8% compared with the industry’s 5.9% growth in the past three months.
Henry Schein, sporting a Zacks Rank #1 at present, has an estimated long-term growth of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and met the same once, the average surprise being 2.97%.
The company’s shares have gained 2.6% compared with the industry’s 5.9% growth in the past three months.
The Cooper Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth of 11%. COO’s earnings missed estimates in three of the trailing four quarters and beat the same once, the average negative surprise being 1.82%.
The company’s shares have gained 10.1% compared with the industry’s 5.9% growth over the past three months.
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Here's Why You Should Retain NextGen (NXGN) Stock for Now
NextGen Healthcare, Inc. is well-poised for growth, courtesy of its solid product portfolio. The optimism, led by solid third-quarter fiscal 2023 performance, along with continued demand for its solutions, is expected to contribute further. However, stiff competition and NextGen’s dependence on third-party partners pose threats.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 10.9% compared with the industry’s 32.3% decline. The S&P 500 Index has gained 3.8% during the same time frame.
This renowned global provider of innovative and cloud-based healthcare technology solutions has a market capitalization of $1.17 billion. It projects 13.9% growth for fiscal 2024 and expects to maintain a strong performance.
NXGN’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 0.5%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Solid Product Portfolio: We are optimistic about NextGen’s innovative cloud-based healthcare technology solutions that empower healthcare practices. Its portfolio includes tightly integrated solutions that deliver on ambulatory healthcare imperatives, including consumerism, digitization, risk allocation, regulatory influence and integrated care and health equity.
Solid Demand for NextGen Solutions: NextGen benefits from strong demand for its services that include Hospitals, EHR and PM. Its Inpatient Clinicals, Lab and Patient Portal EHR solutions have also been gaining considerable traction.
Last month, the company announced that its NextGen Behavioral Health Suite was chosen by the Compass Health Network for providing whole-person care.
Strong Q3 Results: NXGN’s solid third-quarter fiscal 2023 results, including the year-over-year top-line uptick, buoy optimism. Strength in Recurring revenues as well as robust increases in Subscription services, Managed services, and Transactional and data services revenues looks encouraging. The buyout of TSI Healthcare and improvement in Other non-recurring services revenues are also promising.
Downsides
Dependence on Third-Party Partners: NXGN is subject to several risks associated with having a portion of its assets and operations in India, and using third-party service providers in India and other countries. Various factors, such as changes in the current government of India could affect the nation’s economic liberalization and deregulation policies. These might also disrupt India’s business and economic conditions, and NextGen’s business in particular.
Stiff Competition: The markets for healthcare information systems are intensely competitive and NXGN faces significant competition from various sources. While many of its competitors have substantially better resources, the larger ones have greater scale than NextGen. Transaction-induced pressure or other related factors may cause price erosion and other negative market dynamics that could adversely affect the company’s business.
Estimate Trend
NextGen is witnessing a stable estimate revision trend for fiscal 2023. In the past 60 days, the Zacks Consensus Estimate for its earnings has remained steady at 96 cents.
The consensus mark for the company’s fourth-quarter fiscal 2023 revenues stands at $170.6 million, indicating a 12.8% improvement from the year-ago quarter’s reported number.
Our fourth-quarter revenue estimates stand at $170.9 million, indicating a 13% increase from the prior-year quarter’s reported figure.
NEXTGEN HEALTHCARE, INC Price
NEXTGEN HEALTHCARE, INC price | NEXTGEN HEALTHCARE, INC Quote
Stocks to Consider
Some better-ranked stocks from the broader medical space are Becton, Dickinson and Company (BDX - Free Report) , Henry Schein (HSIC - Free Report) and The Cooper Companies (COO - Free Report) .
Becton, Dickinson and Company has an estimated long-term growth of 7.8%. BDX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.47%. Currently, BDX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s shares have gained 0.8% compared with the industry’s 5.9% growth in the past three months.
Henry Schein, sporting a Zacks Rank #1 at present, has an estimated long-term growth of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and met the same once, the average surprise being 2.97%.
The company’s shares have gained 2.6% compared with the industry’s 5.9% growth in the past three months.
The Cooper Companies, carrying a Zacks Rank #2 at present, has an estimated long-term growth of 11%. COO’s earnings missed estimates in three of the trailing four quarters and beat the same once, the average negative surprise being 1.82%.
The company’s shares have gained 10.1% compared with the industry’s 5.9% growth over the past three months.