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NextGen Healthcare (NXGN) Gains 8.1% Post Q2 Earnings Beat

Zacks Equity Research
·4-min read

Shares of NextGen Healthcare, Inc. NXGN climbed 8.1% on Oct 23 on better-than-expected second-quarter fiscal 2021 performance.

The company reported second-quarter adjusted earnings per share (EPS) of 30 cents, beating the Zacks Consensus Estimate by 50%. Moreover, the bottom line rose 25% from the prior-year quarter.

Revenue Details

Revenues of this Zacks Rank #2 (Buy) company amounted to $140 million, up 4.2% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 4.9%.

Segment Details

The company reported second-quarter fiscal 2021 revenues under the following segments:

Total Recurring revenues were $125.7 million, up 4.2% from the year-ago quarter.

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Meanwhile, total Software, hardware and other non-recurring revenues amounted to $14.3 million, up 4.4% on a year-over-year basis.

Margin

In the quarter under review, gross profit totaled $71.1 million, up 3.7% from the prior-year quarter. Gross margin was 50.8%, down 29 basis points (bps).

Adjusted operating profit came in at $53.4 million, up 9.5% year over year. Adjusted operating margin in the fiscal second quarter was 38.1%, up 182 bps.

Fiscal 2021 Guidance

On the back of improvement in market conditions, NextGen is reinstating its annual guidance.

The company projects revenues within the range of $535 to $551 million. The Zacks Consensus Estimate for the same is pegged at $540.5 million.

Adjusted EPS is projected within 83-93 cents. The Zacks Consensus Estimate for the same is pegged at 80 cents.

NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise

 

NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise
NEXTGEN HEALTHCARE, INC Price, Consensus and EPS Surprise

NEXTGEN HEALTHCARE, INC price-consensus-eps-surprise-chart | NEXTGEN HEALTHCARE, INC Quote

Cash Position

Cash and cash equivalents came in at $103.4 million at the end of the fiscal second quarter, compared with $192.3 million at the end of the fiscal first quarter.

At the end of fiscal second quarter, cumulative net cash flow from operations came in at $30.4 million, compared with $23.8 million a year ago.

Summing Up

NextGen exited the fiscal second quarter on a strong note. The company benefited from its operating segments in the quarter under review. Expansion in adjusted operating margin is another plus.The company plans to capitalize on the success of its integrated solution by shifting its client base onto its Spring ‘21 release, which leverages its new patient experience platform. Significant contraction in gross margin remains a concern. Additionally, NextGen faces stiff rivalry in the MedTech space.

Other Key Picks

Some other top-ranked stocks which are expected to report earnings soon include Insulet PODD, IDEXX Laboratories, Inc. IDXX and ResMed RMD.

The Zacks Consensus Estimate for Insulet’s third-quarter 2020 adjusted EPS is currently pegged at 6 cents. The consensus estimate for third-quarter revenues stands at $220.89 million. The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IDEXX currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2020 adjusted EPS is currently pegged at $1.41. The consensus estimate for third-quarter revenues stands at $666.7 million.

The Zacks Consensus Estimate for ResMed's first-quarter fiscal 2021 adjusted EPS is currently pegged at 95 cents. The consensus estimate for revenues stands at $702.4 million. It currently has a Zacks Rank #2.

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