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Why Allscripts Healthcare Solutions Is Sinking Today

By Brian Feroldi - Nov 2, 2018 at 12:39PM

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Shares fall after the company reports third-quarter results that missed the mark.

What happened

After the company disappointing third-quarter results, shares of Allscripts Healthcare Solutions (MDRX 2.04%) fell 17% as of 11:53 a.m. EDT on Friday.

So what

Here's a look at the key numbers from the period:

  • Non-GAAP revenue grew 19% to $536 million. That was below the $549.4 million that Wall Street was expecting.
  • The contract backlog grew 13% to $4.7 billion. However, that represents a sequential decline of $100 million, and its bookings of $246 million were well below the $304 million that was recorded in the year-ago period.
  • GAAP net loss was $36 million. 
  • Non-GAAP net income was $31 million, or $0.18 per share. That was a penny shy of expectations.

Management stated that is now expects to hit the low end of its guidance range for the full year. As a reminder, that guidance calls for at least 17% growth in non-GAAP revenue and at least 16% growth in non-GAAP EPS.

MAn with head against wall in conference room

Image source: Getty Images.

Wall Street punished the stock because of its lower-than-hoped-for quarterly results and tepid guidance.

Now what

2018 is shaping up to be another tough year for shareholders. Shares are currently down more than 30% since January, which only extends this company's long history of destroying shareholder value.

Allscripts Healthcare Solutions is still expecting 2018 to be a year of financial growth, which could provide reasons to hold on to shares. However, I prefer to keep my capital in winning companies, so for that reason, I'm content to look elsewhere for investment opportunities.

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Stocks Mentioned

Allscripts Healthcare Solutions, Inc. Stock Quote
Allscripts Healthcare Solutions, Inc.
MDRX
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