QHR’s Q2 underlines its leadership position in EMR, says Cantor Fitzgerald

Another solid quarter for QHR Technologies (TSXV:QHR) hinted at the growth potential it can unlock in an expanding Electronic Medical Records space, says Cantor Fitzgerald Canada analyst Justin Kew.

This morning, QHR reported its Q2, 2014 results. The company earned $287,687 on revenue of $6.8-million, up 20% from last year’s Q2 topline of $5.7-million.

CEO Al Hildebrandt commented on the quarter.

“We are pleased with the progress we showed in the second quarter of in our overall business,” he said. “We continue to add new clients organically, further strengthening our market leadership position.The management changes made late in the second quarter are proving to be a positive for the organization, with now an individual general manager for each of the EMR and for the RCM divisions. The positive financial impacts of these changes will be seen in future quarters.”

Kew says this was another solid quarter of organic EMR growth for QHR. While he says the company’s adjusted EBITDA number of $800,000 was a little lower than his expectation of $1-million, the company’s topline was slightly ahead of his expectations. The analyst says these quarterly results and QHR’s recent partnership with Bell validates the company’s market leadership position. He believes it has a solid opportunity to consolidate the EMR space further as penetration rates increase.

In a research update to clients today, Kew maintained his “Buy” rating and $1.90 one-year target on QHR, implying a return of 56% at the time of publication.

Disclosure: QHR is an annual sponsor of Cantech Letter.