Nextgen Healthcare (NASDAQ:NXGN) and Allscripts Healthcare Solutions (NASDAQ:MDRX) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Risk & Volatility

Nextgen Healthcare has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Allscripts Healthcare Solutions has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.

Profitability

This table compares Nextgen Healthcare and Allscripts Healthcare Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nextgen Healthcare 1.80% 10.66% 6.96%
Allscripts Healthcare Solutions 18.15% 7.74% 2.33%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Nextgen Healthcare and Allscripts Healthcare Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nextgen Healthcare 1 1 2 0 2.25
Allscripts Healthcare Solutions 0 5 5 0 2.50

Nextgen Healthcare presently has a consensus target price of $18.50, indicating a potential upside of 7.56%. Allscripts Healthcare Solutions has a consensus target price of $14.35, indicating a potential upside of 37.30%. Given Allscripts Healthcare Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe Allscripts Healthcare Solutions is more favorable than Nextgen Healthcare.

Insider & Institutional Ownership

69.0% of Nextgen Healthcare shares are owned by institutional investors. 17.9% of Nextgen Healthcare shares are owned by insiders. Comparatively, 1.1% of Allscripts Healthcare Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Nextgen Healthcare and Allscripts Healthcare Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nextgen Healthcare $531.02 million 2.10 $2.42 million $0.57 30.18
Allscripts Healthcare Solutions $1.75 billion 1.02 $412.30 million $0.55 19.00

Allscripts Healthcare Solutions has higher revenue and earnings than Nextgen Healthcare. Allscripts Healthcare Solutions is trading at a lower price-to-earnings ratio than Nextgen Healthcare, indicating that it is currently the more affordable of the two stocks.

Nextgen Healthcare Company Profile

NextGen Healthcare, Inc. provides software, services, and analytics solutions to medical and dental group practices in the United States. The company's principal products include NextGen Enterprise EHR, which stores and maintains clinical patient information; and a workflow module, prescription management, automatic document and letter generation, patient education, referral tracking, interfaces to billing and lab systems, physician alerts and reminders, and reporting and data analysis tools. Its products also comprise NextGen Enterprise PM, a practice management (PM) solution; and NextGen Office, a cloud-based electronic health record and PM solution. In addition, the company offers automation and workflow solutions, including NextGen Mobile Health Solutions, NextGen Electronic Healthcare Transactions, NextGen Pre-Service Clearance, and NextGen Patient Payment solutions. Further, it provides analytics, population health, and patient engagement solutions, such as NextGen Population Health Informed Analytics, NextGen Population Health Patient Care Coordination, NextGen Population Health Performance Management, and NextGen Patient Portal solutions. Additionally, the company offers NextGen Connected Health and NextGen Share interoperability solutions. It also provides professional services, including training, project management, functional and detailed specification preparation, configuration, testing, installation, support, and client services. It serves physician hospital and management service organizations, independent physician associations, accountable care organizations, ambulatory care centers, and community health centers through a sales force and reseller channel. NextGen Healthcare, Inc. has a strategic partnership with OTTO Health LLC. The company was formerly known as Quality Systems, Inc. and changed its name to NextGen Healthcare, Inc. in September 2018. NextGen Healthcare, Inc. was founded in 1974 and is headquartered in Irvine, California.

Allscripts Healthcare Solutions Company Profile

Allscripts Healthcare Solutions, Inc. provides information technology solutions and services to healthcare organizations in the United States, Canada, and internationally. It offers electronic health records, connectivity, private cloud hosting, outsourcing, analytics, patient engagement, clinical decision support, and population health management solutions. The company's Clinical and Financial Solutions segment provides integrated clinical software applications and financial and information solutions, which primarily include EHR-related, and financial and practice management software solutions, as well as related installation, support and maintenance, outsourcing, private cloud hosting, revenue cycle management, training, and electronic claims administration services. Its Population Health segment offers health management and coordinated care solutions that enable hospitals, health systems, accountable care organizations, and other care facilities to connect, transition, analyze, and coordinate care across the entire care community. The company's Netsmart segment operates in and provides software and technology solutions to the health and human services, and post-acute sectors of health care. The company serves physicians, hospitals, governments, health systems, health plans, life-sciences companies, retail clinics, retail pharmacies, pharmacy benefit managers, insurance companies, and employer wellness clinics, as well as post-acute organizations, such as home health and hospice agencies. Allscripts Healthcare Solutions, Inc. was founded in 1986 and is headquartered in Chicago, Illinois.

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