) to outperform from market perform.
Analyst Sean Wieland says he recommends Quality Systems due to strength in its core product Nextgen, strong balance sheet ($3.90 per share in cash), anticipated strong June quarter driven by handful of larger contracts, and relatively attractive valuation in comparison to direct competitor Allscripts Healthcare.
He is seeing more success in a larger group market practice, and therefore raises his 33 cents first-quarter earnings per share estimate on $25 million revenue to 36 cents on $27 million revenue.
Wieland also ups his $1.54 fiscal 2006 (ending March) earnings per share estimate on $114 million revenue to $1.64 on $120 million revenue. He says his $59 target (up from $49) implies a 20% discount to Allscripts Healthcare on an EV/EBITDA basis.