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Nextgen Healthcare (NXGN) Up 4.8% Since Last Earnings Report: Can It Continue?

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Zacks Equity Research
·3-min read
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It has been about a month since the last earnings report for Nextgen Healthcare (NXGN). Shares have added about 4.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Nextgen Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

NextGenEarnings and Revenues Beat Estimates in Q4

NextGen Healthcare, Inc.reported fourth-quarter fiscal 2020 adjusted earnings per share of 20 cents, beating the Zacks Consensus Estimate of 19 cents by 5.3%. However, the bottom linedeclined 13% from the prior-year quarter.

For fiscal 2020, adjusted EPS came in at 83 cents, down 3.5% from the previous period. The metric outpaced the Zacks Consensus Estimate of 81 cents.

Revenue Details

Revenues of this Zacks Rank #3 (Hold) company amounted to $136.4 million, up 1.2% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate by 0.4%.

For fiscal 2020, revenues grossed $540.2 million, up 2.1% from the prior-year period. However, the metric missed the consensus mark by 0.1%.

Bookings Update

Bookings for the quarter came in at $31 million, down 12.4% from the year-ago quarter.

Segment Details

The company reported fourth-quarter fiscal 2020 revenues under the following segments:

Total Recurring revenues were $124.5 million, up 3.6% from the year-ago quarter.

Meanwhile, total Software, hardware and other non-recurring revenues amounted to $11.9 million, down 18.7% on a year-over-year basis.

Margin

In the quarter under review, gross profit totaled $68 million, down 6.4% from the prior-year quarter. Gross margin was 49.9%, down 400 basis points (bps).

Operating loss in the fiscal fourth quarter was $6.3 million, against the year-ago quarter’s operating income of $6.5 million.

Fiscal 2021 Guidance

NextGen announced in its business update on Apr 28, 2020 that it will not issue any guidance for fiscal 2021 or the years beyond considering the uncertainty surrounding the COVID-19 pandemic. The company will decide on guidance after evaluating the scenario once it stabilizes and there is more confidence in the macro environment.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -7.69% due to these changes.

VGM Scores

At this time, Nextgen Healthcare has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Nextgen Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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