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NextGen's Medfusion Buyout to Improve Patient Experience

Zacks Equity Research

NextGen Healthcare, Inc. NXGN recently announced an agreement to acquire Medfusion for a deal value of $43 million, to be paid in cash. The acquisition is expected to close in December 2019. Notably, the buyout will fortify NextGen’s foothold in the global healthcare information technology (HCIT) space.

For investors’ notice, North Carolina-based Medfusion is an HCIT leader whose patient experience platform caters to patient needs and enables retrieving and aggregating of patient data from electronic health records (EHR).

Rationale Behind the Deal

HCIT solutions are emerging as powerful tools to curtail healthcare costs while improving healthcare quality.

The latest buyout is likely to actively involve NextGen’s patients in making choices based on both cost and quality. This will enable high-quality healthcare apart from driving patient engagement.

Notably, Medfusion’s patient experience platform is a modern portal with an attractive, easy-to-use interface designed to run on any device. The platform includes powerful capabilities for patient intake, patient scheduling and patient payment capabilities and is used by more than 16 million patients.

Market Prospects

MarketsandMarkets forecasts the global HCIT market to reach a worth of $392 billion by 2024, driven by significant development with the introduction of healthcare reforms in developed and developing nations.

Hence, the latest development has been a well-timed one for NextGen.

Other Developments

Lately, NextGen showcased new capabilities and services for NextGen Enterprise, a flagship practice Management and EHR system. The system will provide patients with intuitive visual dashboards, financial intelligence and proactive management tools.

Price Performance

Reflective of these, the Zacks Rank #3 (Hold) stock has rallied 8.6%, outperforming the industry's 1.3% rise in a year’s time.

Key Picks

Some better-ranked stocks in the broader medical sector are DexCom DXCM, CONMED Corporation CNMD and DENTSPLY SIRONA XRAY. While DexCom sports a Zacks Rank #1 (Strong Buy), CONMED and DENTSPLY each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DexCom’s fourth-quarter earnings growth is projected at 29.6%.

CONMED’s long-term earnings growth rate is expected to be 17%.

DENTSPLY’s long-term earnings growth rate is estimated at 11.6%.

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