These analysts are optimistic about the surging demand for EHR solutions as a result of the stimulus package but expect volatility on a quarter-to-quarter basis as well as lower margins on business conducted with smaller group practices. Further, a potentially challenging selling environment due to lingering weakness in the broader economy raises the concern of the analysts. These analysts believe that the shares would probably be only appropriate for the long-term investors, comfortable with substantial intermediate-term uncertainty. As such, the lack of earnings upside over time and premium valuation keep them on sidelines. Critically, they do not believe that the company’s highly recurring revenue base (although a benefit to revenue visibility) will provide enough incremental operating leverage to meaningfully drive earnings expectations higher.
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