Wednesday, August 08, 2007

Allscripts (NASDAQ:MDRX): Color on quarter

- Jefferies comments on Allscripts (NASDAQ:MDRX) following results noting revenue of $70MM (+17% YOY) fell short of their $74MM and PF EPS of $0.13 (+41% YOY) was a penny below their and consensus estimates. Revenue & EPS missed, but the focus should be on 2Q clinical software bookings growing 30% YOY to $52MM+. This was below Jeffco's lofty est. of $54MM but more importantly above the Street's perceived bogey of $50MM.

Novant selecting MDRX's practice management is a huge success for MDRX, b/c it means Novant is scrapping GE/IDX PM for MDRX. Jeffco believes this reveals an opportunity for MDRX to replace IDX at other customers.

MDRX reaffirmed '07 guidance, which implies a steep ramp in back half. Mgmt. stated that it has increased confidence in attaining guidance, and for the firm, they take comfort in strong 2Q bookings. Any weakness from 2Q miss is a buying opportunity as $52MM+ of bookings (w/o mega-deals & ~80% seq. growth) should ease fears of slowdown.

Reits Buy and $33 tgt.

Notablecalls: Bookings is what these stocks trade on. The stock got hit in after hours action and we have some firms lowering their ests and tgt's this AM. I think MDRX is a bounce candidate as expectations coming into the qtr were not high given recent misses. The growth in ambulatory EMR/PM market continues to be OK. I would pay upto $23.50 for MDRX.

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