Can TruBridge Fuel Computer Programs' (CPSI) Q4 Earnings?

Zacks Equity Research

Computer Programs And Systems, Inc. CPSI fourth-quarter 2018 results are scheduled for release on Feb 15. The company’s strong diversified portfolio of RCM solutions is likely to drive top-line growth in the quarter to be reported. Computer Programs’ RCM suite of services, which include Accounts Receivable Management Services, Private Pay, medical coding and more, are added positives. Each of these offerings has a client penetration rate between 10% and 20%.

Q3 Results at a Glance

In the last reported quarter, Computer Programs delivered adjusted earnings of 79 per share, which surpassed the Zacks Consensus Estimate of 48 cents. Meanwhile, revenues came in at $69.3 million, missing the Zacks Consensus Estimate of $71 million.

The company has an average four-quarter positive earnings surprise of 30.2%.

Computer Programs and Systems, Inc. Price and EPS Surprise

 

Computer Programs and Systems, Inc. Price and EPS Surprise | Computer Programs and Systems, Inc. Quote

Which Way Are Q4 Estimates Trending?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 58 cents, reflecting a 7.9% decline year over year. For revenues, the same is pinned at $74.4 million, mirroring a 4.7% decline year over year.

Let’s delve deeper.

Other Factors at Play

TruBridge to Drive Growth

TruBridge platform’s solid bookings trend, good client retention rate and huge recurring revenue base are likely to significantly boost Computer Systems’ results in the fourth quarter. Also, the company is expected to benefit from its acute and postacute EHR client base. Notably, of the $7.3 million in TruBridge bookings in the third quarter, 82% stemmed from cross sales into acute and postacute EHR client base.

In the meantime, Computer Systems’ pipeline remains strong as it is expected to generate 25 to 30 new EHR system contracts on an annual basis. This, in turn, is likely to have a positive impact on the company’s performance in the fourth quarter.

American HealthTech (“AHT”)

Per management at Computer Systems, the AHT solution has been witnessing positive client feedback. In the last reported quarter, the first phase of the AHT 18 plan had been executed, which is currently available at 150 customer sites at the moment. The AHT platform’s solid prospects should prove beneficial to the company in the to-be-reported quarter.

 What Does Our Model Say?

Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. This is not the case here.

Earnings ESP: Computer Systems has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Computer Systems carries a Zacks Rank #3.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Worth a Look

DexCom DXCM has an Earnings ESP of +8.93% and a Zacks Rank #2.

Medidata Solutions, Inc. MDSO has an Earnings ESP of +0.54% and a Zacks Rank #2.

Wright Medical Group N.V. WMGI has an Earnings ESP of +58.24% and a Zacks Rank #2.

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