NEW YORK (AP) — Shares of Allscripts rose Tuesday after an analyst upgraded the stock, saying the electronic health records company is turning its business around as a result of successful investments.
THE SPARK: Maxim Group analyst Anthony Vendetti upgraded the shares to "Buy" from "Hold" and set a price target of $20. He said Allscripts has strengthened its products, allowing the company to win new clients and expand its contracts. Vendetti said contract bookings for Allscripts should continue to improve in the years to come.
"The investments in new products and services are translating into credible signs of sustainable revenue growth," he wrote in a note to clients. "We believe the company's heavy investments in client retention should prove successful (as evidenced by the expanded partnerships with key clients)."
THE BIG PICTURE: Allscripts' revenue fell 7 percent to $1.02 billion over the first three quarters of 2013. However in January the company said it expects its adjusted revenue to grow 5 to 8 percent per year from 2014 through 2016, and it said its adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, should rise 18 to 22 percent per year over the same period. That forecast helped boost its shares to their highest price in almost two years.
Allscripts Healthcare Solutions Inc. had reported an extended decline in contract bookings, but results have improved in the last two quarters. The Chicago company is scheduled to report its fourth-quarter results after the market closes on Feb. 20.
SHARE ACTION: Allscripts stock rose 55 cents, or 3.4 percent, to $16.77 in afternoon trading. The company's shares have risen 53 percent over the last 12 months.