The Company develops and markets healthcare information systems that automate aspects of medical and dental practices, networks of practices and management service organizations, ambulatory care centers, medical and dental schools.
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Quality Systems, Inc. founded in 1974, develops and markets information systems that automate certain aspects of the healthcare industry. The company offers a network of practices that include physician hospital organizations, ambulatory care centers and community health centers. Its business is divided into two division’s i.e. QSI division that includes development of software suites mainly for dental and niche medical practitioners and the NextGen Healthcare division that focuses on developing and marketing products and services for medical practices. The NextGen division generates the bulk of around 85% of the total inflows, and is a key driver for revenue and margin growth.
The healthcare industry is changing rapidly, the providers are increasing their reliance on technology to help maximize the efficiency of business practices, improving patient care, and maintaining the privacy of patient information. Adding to it the positives of changing paper records to digital ones have induced various hospitals to become the center of technology adoption. However, the automation of medical records has just reached 14% of all U.S. physicians, thus leaving a huge room for growth in the industry where revenues are expected to grow two folds in coming five years.
The company’s future looks appealing with higher anticipated growth in the industry and top performance of NexGen that has become one of the top hundred fastest growing technologies company. Quality System also has a strong order book, which will further have a positive impact on the financial performance and earnings quality. Adding to it, company’s long record of notching up higher returns in comparison to its peers, the increasing acceptance of NextGen software and its aggressive sales team, makes Quality System a positive investment.
With greater accountability now required in the management of hospitals, clinics and private offices this company appears to have a lot going for it. Have added shares to my portfolio with long term objective.
Quality Systems delivered a yet another superlative performance. For the nine months ended 31 December 2006, revenue observed a 34% rise to $112 million, as a result of higher software, hardware & supplies sales, while improved implementation & training services income and sturdy growth in Electronic data interchange services, further aided to invigorate the top-line. Net Income also registered an upswing, rising by staggering 58% to $24.7 million, as a result of improved margins and decreased total cost of system sales and an increase in interest income.
NextGen recently announced receiving of GoldRx certification status from SureScripts, Operators of the Pharmacy Health Information Exchange. Though this certification is more inclined towards operational side of the company, it can also lay an important role in improving the top-line, by gaining added clients. Moreover the company continues to gain from strong demand health care information systems and automation of medical services. Company being a key player in the industry is surely benefiting from this growing trend.
In the past one year company’s stock has seen a massive run-up rising by over 30% year-till-date. However in recent past the prices have also been affected by late filings and rounds of restatement of financials. Going ahead, considering company’s superlative performance, with EPS growing by over 40% in past three years, it will be highly unlikely that such a trend will be abated, especially when we consider the growing top-line and improving margins, making Quality systems a strong investment for 2007.
Thanx 4 the dtail provided. I want to add a diff spin. The issue w/ healthcare and I.T. has been cost/complexity/staffing/etc. I can't think of a better play for Saas (software as a service ala Salesforce.com) than this arean, to keep costs down. I'm pro QSII just lookin for someone like them to deploy over the net as a way to accelerate growth and simplify complexity. Whoever does this, will really open up the growth/transition.