Ashleigh Rogers
Long/short equity, growth at reasonable price, value, banks

Quality Systems Is A Mess: Shares May Have More Room To Fall

Electronic health records (or EHRs) developer Quality Systems Inc (NASDAQ:QSII) is a mess. The company recently reported very disappointing earnings (adjusted EPS of $0.11 vs. $0.29 a year ago) that were significantly below forecasts ($0.15 below my expectations, $0.11 below consensus). For a stock that is supposed to be a major beneficiary of the move towards a national system of electronic health records, QSII is certainly not living up to the hype. In the most recent quarter, sales fell 5%. At this point company sales were supposed to be accelerating (perhaps anywhere from 1.5-3%), but that expectation on the part of analysts is clearly not panning out.

Hospital Solutions sales, a key segment for the firm, fell for...

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