Two firms launch coverage of QHR Technologies with buy ratings

After the company reported record Q3 revenue, two more firms have launched coverage of Kelowna-based QHR Technologies (TSXV:QHR) with buy ratings.

Laurentian and LB Securities yesterday initiated coverage of QHR with a BUY. Laurentian placed a one-year target of $1.65 on the firm. The move comes after Paradigm Capital boosted their target price on QHR by twenty-five cents, to $1.50.

November 19th’s third quarter was QHR’s third consecutive in which it reported EBITDA of more than $1-million. The company’s topline of $8.54-million was a record, and an increase of 22% over last year’s Q3.

CEO Al Hildebrandt explained why the company’s performance has been so reliable.

“We continue to focus on developing our strong and stable business model around recurring revenue, he said in a note accompanying the results. “Our recurring revenue was 76 per cent of total revenue for the quarter and 88 per cent of total expenses for the quarter.”

Kelowna’s QHR Technologies has become an aggressive consolidator in the electronic medical records space. The company, which is now looking to enter the U.S. market, is clearly gaining critical mass; its revenue has grown from just $5.89 million in 2007 to $29.4-million in fiscal 2012. QHR’s growth is mirroring larger trends. A recent report from MarketResearch.com said the U.S. EMR market is expected to grow from $2.17-billion in 2009 to more than $6-billion in 2015; an estimated compound annual growth rate of 18.1%.

At press time, shares of QHR Technologies were up 4% to $1.05.

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