Quality Systems (NASDAQ:QSII) shares rose sharply higher after beating revenue and earnings consensus estimates for the fourth quarter. Quality Systems, known to its clients as NextGen Healthcare, has been making steady growth in market share. Its revenue of $135 million in the fourth quarter exceeded revenue estimate by $3.82 million.
Quality Systems stock trades around $17 a share following the latest rally. QSII stock has the 52-week trading range of $12.24 – $17.74 – with the market cap of $1 billion.
The company continues to see robust demand for its RCM pipeline combined with the success of its NextGen Mobile Platform and NextGen Population Health Analytics Suite. Quality Systems full-year revenue jumped to $531.0 million from $509.6 million in the past year.
Quality Systems: Steady Outlook for Revenue Growth
The company expects steady revenue growth in fiscal 2018. Booking for Quality Systems solutions and services increased modestly over the past year period. Bookings rose 9% year over year on an actual basis and surged 5.5% on pro forma basis.
Consequently, the company expects its fiscal 2019 sales in the range of $548 million, higher from $531 million in fiscal 2018. Its Non-GAAP EPS of are expected in the range of $0.70 and $0.78 per share.
Mr. Frantz said, “The successes we’ve seen over the course of fiscal 2018, particularly the sales performance during the fourth quarter, maintain our confidence in our long-term targets.”
Valuation and Price Target
Piper Jaffray has increased its price target for Quality Systems to $22.00 with “Overweight” rating on the stock. The new target price represents significant growth from its current level. JPMorgan Chase & Co. and Zacks Investment Research issued “hold” rating for Quality Systems.
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Its shares are trading slightly below the industry average. QSI stock trades around 1.63 times to sales and 2.63 times to earning, compared to the industry average of 2.07 times to sales and 2.98 times earnings.
Featured Image: Depositphotos/© kjpargeter
