2015 holds a lot of promise for QHR, says Haywood

Despite a fourth quarter that saw softer than expected margins, 2015 is still shaping up nicely for QHR (TSXV:QHR), says Haywood analyst Massimo Voci.

This morning, QHR reported its fourth quarter and fiscal 014 results. For the fourth quarter, QHR posted an EBITDA loss of $900,000 on revenue of $7.5-million, a topline that was up 22.4% over the same period last year.

“This past year we have expanded our strategy to look for new opportunities to grow our business. Our core EMR product continues to perform very well allowing us to increase our development efforts, and make new investments in technology for our future,” said CEO Al Hildebrandt. “We believe that a strong cash position should enable us to expand on what we are doing well and structure for future growth as we add to our suite of product offerings.”

Voci says the quarter was essentially in line with his expectations, with the top line coming in a little better and the bottom a little softer than expected. The analyst points out that company’s the fourth quarter has been seasonally weak from a profitability perspective and says he expects that margins will rebound in the quarters to come.

“Key growth drivers in F2015 include the transition of Bell users to Accuro, the potential for the transition of some existing Accuro users local to ASP (higher ARPU), and from an Adjusted EBITDA perspective the potential sale of the RCM division,” said Voci.

Following the quarter, Voci revised his estimates on QHR. He now expects revenue of $32.6-million in fiscal 2015 instead of $32.2-million, with adjusted EBITDA coming in at $3.9-million down instead of $4.6-million.

In a research update to clients today, Voci maintained his “Buy” rating and one year target of $1.80 on QHR, implying a return of 24% at the time of publication.

Disclosure: QHR is an annual sponsor of Cantech Letter.