Allscripts' Latest Initiative Eradicates Price Ambiguity

In an initiative to eradicate ambiguity while determining medicinal costs and discounts, Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) recently launched Allscripts Real-Time Health System, an exclusive work-flow solution to optimize the clinical and financial impact of medical prescriptions and enhance prescription price transparency.

With the latest launch, Allscripts aims at providing clinicians and patients with complete information including medication price, cost of alternative therapies, and competitive prices of the prescribed therapy at different pharmacies. Notably, Allscripts is the first major healthcare information technology player to come up with such a solution.

Undoubtedly, Allscripts Real-Time Health System will boost consumer knowledge and satisfaction. Per management, the company will embed prescription pricing information into the work-flow system with the help of leading pharmacy benefit managers and technology partners in the nation.

In this regard Management at Allscripts is hopeful about the company’s partnerships with DrFirst, GoodRx and Surescripts to deliver real-time benefit and price information.

Earlier this month, Allscripts announced that its dbMotion Solution platform has been selected by South Western Sydney PHN (SWSPHN) to deliver integrated care. Notably, dbMotion Solution is Allscripts’ proprietary Community interoperability platform. The dbMotion Solution will support SWSPHN’s goals of improving clinical excellence and promoting quality care. It will also help SWSPHN collaborate with internationally recognized dbMotion sites in the United States, Canada, the U.K. and Israel.

Stock Performance Lacks Luster

Allscripts has a Zacks Rank #3 (Hold).

The company has had a discouraging run on the bourse over the last one year. The stock represented a return of just 4.5%, comparing unfavorably with the S&P 500’s gain of 16.5%. Further, the current level is lower than the broader industry’s return of 9.6% over the same time frame.

Notably, Allscripts expects a modest increase in operating expenses during the second half of 2017 to support business growth. The company’s products have a long sales cycle which involves decision making at different managerial levels. This increases the company’s operating expenses and might even result in cancellation of orders.

Our Take

Allscripts’ management is focused on various restructuring initiatives, research and development plans and launch of exclusive products. Management has also been trying to streamline operational efficiency and cater to client needs with the introduction of products.

We believe favorable demographic trends, reinforced by a supportive regulatory environment, are expected to sustain growth in demand for the company. Higher client demand for the company’s population health management solutions should drive long-term growth. A long-term expected earnings growth rate of 11.8% instills confidence in investor in this regard.

Key Picks

A few better-ranked stocks in the broader medical sector are Edwards Lifesciences Corp. (NYSE:EW) , IDEXX Laboratories, Inc. (NASDAQ:IDXX) and Cogentix Medical, Inc. (NASDAQ:CGNT) .

Notably, Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories and Cogentix Medical have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences delivered an average earnings beat of 10.8% over the last four quarters. The company has a long-term expected earnings growth rate of 15.2%.

IDEXX Laboratories delivered an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Cogentix Medical came up with a positive earnings surprise of 200% in the last quarter. The stock represented a stellar return of 100.9% over the last year.

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