Piper Jaffray Hikes Quality Systems to Outperform
Piper Jaffray upgraded Quality Systems (QSII) to outperform from market perform, citing the healthcare information systems company's recently announced third quarter results.
Analyst Sean Wieland noted that the company accounted for deferred revenue recognition on its $4 million contract with the technology company Siemens (SI). He says the company's third quarter earnings per share (EPS) of 35 cents were well short of his 46 cents estimate, while revenue of $26.8 million was also below his $31.7 million forecast. But had the company been able to recognize the revenue from its Siemens contract in the quarter, he thinks EPS would have been 48 cents, which is 2 cents ahead of his estimates. He says the reason for the deferral could be any number of reasons, but management provided little commentary. However, he thinks the company's recent earnings miss presents a buying opportunity, as its business fundamentals are still very much intact. He has an $86 stock price target.