Zacks Investment Research Downgrades Quality Systems (QSII) to Sell

Zacks Investment Research lowered shares of Quality Systems (NASDAQ:QSII) from a hold rating to a sell rating in a report released on Thursday.

According to Zacks, “Quality Systems has underperformed the broader industry over the past year. Of the major concerns, lackluster performance in the Total Software, Hardware and Related segment, and intensifying competition in the HCIT markets are likely to keep the company’s margins under pressure. Further, Quality Systems expects software license and hardware revenues to remain under pressure for the remainder of the fiscal. Operating expenses are also high for Quality Systems due to acquisition-driven costs. Continued acquisition poses integration risks for the acquiring company. However, Quality Systems ended the third quarter on a positive note. Acquisitions have significantly expanded Quality Systems’ product line over the last couple of years. The company’s solid recurring revenue base is also a key catalyst. Revenues are also expected to be benefitted from EagleDream software platform, which has been enjoying favorable market response.”

Several other research analysts have also issued reports on the company. BidaskClub lowered Quality Systems from a sell rating to a strong sell rating in a research report on Wednesday. Piper Jaffray Companies reiterated a buy rating and issued a $17.00 price target on shares of Quality Systems in a report on Friday, January 26th. Citigroup began coverage on Quality Systems in a report on Thursday, January 4th. They issued a sell rating and a $13.00 price target for the company. SunTrust Banks reiterated a hold rating and issued a $15.00 price target on shares of Quality Systems in a report on Friday, November 17th. Finally, Jefferies Group reiterated a hold rating and issued a $14.50 price target on shares of Quality Systems in a report on Sunday, October 29th. Five equities research analysts have rated the stock with a sell rating, six have assigned a hold rating and one has given a buy rating to the stock. Quality Systems has a consensus rating of Hold and a consensus price target of $14.44.

Shares of Quality Systems (NASDAQ QSII) traded down $0.04 during midday trading on Thursday, reaching $12.42. The company’s stock had a trading volume of 154,200 shares, compared to its average volume of 338,356. The company has a quick ratio of 1.19, a current ratio of 1.19 and a debt-to-equity ratio of 0.12. Quality Systems has a 52 week low of $12.25 and a 52 week high of $17.74. The company has a market capitalization of $793.88, a PE ratio of 20.43, a P/E/G ratio of 2.85 and a beta of 0.73.

Quality Systems (NASDAQ:QSII) last issued its quarterly earnings data on Thursday, January 25th. The company reported $0.15 earnings per share for the quarter, hitting the Thomson Reuters’ consensus estimate of $0.15. Quality Systems had a return on equity of 12.08% and a net margin of 3.39%. The company had revenue of $131.70 million for the quarter, compared to analysts’ expectations of $130.63 million. During the same period in the previous year, the firm posted $0.23 earnings per share. The firm’s revenue for the quarter was up 3.0% on a year-over-year basis. equities analysts predict that Quality Systems will post 0.56 EPS for the current year.

Large investors have recently modified their holdings of the stock. LS Investment Advisors LLC raised its stake in Quality Systems by 404.4% in the fourth quarter. LS Investment Advisors LLC now owns 8,777 shares of the company’s stock worth $119,000 after buying an additional 7,037 shares in the last quarter. Piedmont Investment Advisors LLC bought a new position in Quality Systems in the second quarter worth approximately $173,000. Koch Industries Inc. bought a new position in Quality Systems in the fourth quarter worth approximately $148,000. Millennium Management LLC bought a new position in Quality Systems in the fourth quarter worth approximately $160,000. Finally, Victory Capital Management Inc. bought a new position in Quality Systems in the third quarter worth approximately $199,000. 67.43% of the stock is owned by institutional investors.

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Quality Systems Company Profile

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.

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