Analyzing Quality Systems (QSII) and Its Competitors

Quality Systems (NASDAQ: QSII) is one of 187 public companies in the “IT Services & Consulting” industry, but how does it contrast to its peers? We will compare Quality Systems to similar companies based on the strength of its valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Volatility & Risk

Quality Systems has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500. Comparatively, Quality Systems’ peers have a beta of 1.12, meaning that their average share price is 12% more volatile than the S&P 500.

Earnings & Valuation

This table compares Quality Systems and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Quality Systems $509.62 million $18.24 million 30.93
Quality Systems Competitors $2.79 billion $290.83 million 706.40

Quality Systems’ peers have higher revenue and earnings than Quality Systems. Quality Systems is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

69.3% of Quality Systems shares are owned by institutional investors. Comparatively, 63.0% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 17.9% of Quality Systems shares are owned by company insiders. Comparatively, 15.9% of shares of all “IT Services & Consulting” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Quality Systems and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quality Systems 2 8 1 0 1.91
Quality Systems Competitors 722 4626 7375 166 2.54

Quality Systems currently has a consensus price target of $15.08, indicating a potential upside of 13.41%. As a group, “IT Services & Consulting” companies have a potential upside of 5.49%. Given Quality Systems’ higher probable upside, research analysts plainly believe Quality Systems is more favorable than its peers.

Profitability

This table compares Quality Systems and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quality Systems 5.12% 14.70% 9.41%
Quality Systems Competitors -14.10% -252.35% -2.64%

Summary

Quality Systems peers beat Quality Systems on 7 of the 13 factors compared.

About Quality Systems

Quality Systems, Inc. (QSI) primarily, through its NextGen Healthcare subsidiary, provides technology-based solutions and services to the ambulatory care market in the United States. The Company is engaged in developing and marketing software and services that automate certain aspects of practice management (PM) and electronic health records (EHR) for medical and dental practices. The Company operates through three segments: the NextGen Division, the RCM Services Division and the QSI Dental Division. It also provides implementation, training, support and maintenance for software and complementary services, such as revenue cycle management (RCM) and electronic data interchange (EDI). The Company’s clients include single and small practice physicians, networks of practices, such as physician hospital organizations (PHOs), management service organizations (MSOs), accountable care organizations (ACOs), ambulatory care centers, community health centers, and medical and dental schools.

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