Look for continued improvement at QHR, says Laurentian

QHR’s (Stock Quote, Chart, News: TSXV:QHR) fourth quarter results should show continued momentum, says Laurentian Bank Securities analyst Nick Agostino.

Tomorrow, before market open, QHR will report its fourth-quarter and fiscal 2014 results. The Kelowna-based company is following up on a Q3 in which it posted revenue of $6.9 million, up 16% increase over the $6.0 topline is posted in the same period a year prior.

QHR is still on the hunt for a CEO after long time boss Al Hildebrandt retired earlier this year.

Agostino thinks QHR will post EBITDA of $900,000 on revenue of $7.0-million in its Q4, in line with the street consensus. The analyst thinks the company will see its Average Revenue Per User number climb five to ten per cent on the back of its agreement with Bell, its new ASP funded status in Ontario, and the fact that it is now selling a full-suite EMR solution to new and existing clients.

Agostino thinks QHR’s EMR division will generate sales of $6.2-million, with EBITDA margins of 20%, and its RCM business will post sales of $816,000 with and EBITDA margins of -40%. He expects that RCM will be EBITDA break even midway through 2015.

In a research update to clients today, Agostino maintained his “Buy” rating and $1.80 one year target on QHR, implying a return of 26.8% at the time of publication.

Disclosure: QHR is an annual sponsor of Cantech Letter.

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