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Why Allscripts Stock Blasted 16% Higher Today

What happened

Allscripts Healthcare Services (NASDAQ: MDRX) was a big winner in a losing session for the stock market on Tuesday. The healthcare technology company's shares rose a mighty 16% on the day, thanks to preliminary results that topped both internal and external expectations. The announcement of a new share repurchase program didn't hurt, either.

So what

For its fourth quarter of 2021, Allscripts' preliminary figures indicate that revenue came in at $390 million to $395 million. That's comfortably above the average analyst estimate of just under $387 million.

Image source: Getty Images.

The niche healthcare company also proffered selected estimates for the entirety of 2021. For the year, non-GAAP (adjusted) earnings before interest, tax, depreciation, and amortization (EBITDA) should land at $295 million to $300 million. Analyst estimates for this line item weren't immediately available, but that range is notably higher than Allscripts' previous expectation of $275 million to $285 million.

Meanwhile, free cash flow is anticipated to be $165 million to $170 million. Again, this is higher than the company's previous forecast ($145 million to $155 million).

Allscripts did not delve into the reasons why the new numbers are well above its previous projections.

As for the share repurchase program, the company is launching a fresh initiative under which it can buy up to $250 million worth of its common stock. It does not have a set termination date, and it replaces a prior share buyback program for up to $350 million. Under that initiative, in Q4 the company bought back $108 million of its own shares.

Now what

The difference between previous anticipations and current estimates is very encouraging, but of course this will ultimately depend on the official, audited results. Allscripts is slated to publish both Q4 and full-year 2021 figures after market hours on Thursday, Feb. 24.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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