SVB Leerink ups NextGen Healthcare PT to $21 from $14

SVB Leerink raised its price target for NextGen Healthcare (NASDAQ:NXGN) to $21 from $14, citing unaudited preliminary fiscal third quarter results ended Dec. 31, 2020 that beat Street estimates and higher fiscal 2021 guidance. The stock was quoted at $21.59, up $1.12, in afternoon trading on Jan. 13.

“We attribute NextGen’s accelerated growth to a pickup in client spend as providers look to become more competitive in the post-pandemic tech-forward healthcare environment, with Electronic Health Record conference commentary skewing positive as we kick off 2021,” writes analyst Stephanie Davis.

“On the profitability side we believe the company is benefitting from the transition to a more subscription-based business model which provides more stability and visibility into growth and margins,” she added.

Based on the third quarter preannouncement and a “stronger go-forward profitability assumption,” Ms. Davis raised her fiscal 2021 revenue estimate to $553-million from $550-million. She also raised adjusted EPS to 96 cents a share from $86 cents.

She also raised her fiscal 2022 revenue estimate to $574-million and EPS to $1.06 on higher projected growth and further margin improvements.