TECSYS is a still a buy: Laurentian Bank Securities

After attending the company’s annual user conference, Laurentian Bank Securities analyst Nick Agostino remains bullish on TECSYS Inc. (TECSYS Stock Quote, Chart, News: TSX:TCS).

Agostino recently attended TECSYS’s SmartVision Conference, which ran from June 3-6 in Orlando. The analyst says one of his biggest takeaways is that healthcare is growth is re-accelerating.

“As part of CEO Peter Brereton’s presentation, he noted healthcare is coming back,” the analyst says. “Healthcare is 45% of TCS’s sales but represents 56% of new bookings. Healthcare growth is re-accelerating, approaching double-digit rates (historical highs 20-25%) vs. 0% a few quarters ago, and Complex Distribution is holding at 10%. Supporting this, many of the attendees at this year’s event were from the hospital sector with 14 IDNs (45 total healthcare attendees) present vs. 9 at the last event. According to TCS, IDN attendees are typically ones about to undertake new deployments, expansions or add additional modules. While existing customer expansions are sustaining the growth, new client wins are accelerating it.”

Agostino says his talks with users such as Trinity Health and the Mayo Clinic confirm TECSYS’s strength in the healthcare market.

In a research update to clients today, the analyst reiterated his “Buy” rating and one-year price target of $18.25 on TECSYS, implying a return of 24.2 per cent at the time of publication.

Agostino thinks TCS will generate EBITDA of $6.1-million on revenue of $70.2-million in fiscal 2018. He expects the company will improve those numbers to EBITDA of $10.6-million on a topline of $77.6-million the following year.