Leerink Partners Cuts Price Target on Computer Programs & Systems (CPSI) Following Weak 3Q
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Leerink Partners maintained a Market Perform rating on Computer Programs and Systems (NASDAQ: CPSI), and cut the price target to $25.00 (from $26.00), following the company's 3Q earnings report. Total revenue of $64.7M was down ~6% q/q and missed the Consensus estimates at $67.7M. Non-GAAP EPS of $0.34 were below the consensus estimates at $0.49.
Analyst David Larsen commented, "Last night CPSI announced 3Q16 results that largely missed expectations and the company did not provide forward guidance, consistent with last quarter. CPSI had six new system sales in the quarter, 60% of which were sold on subscription/cloud basis. We estimate that the mix shift to subscription has served to elongate revenue recognition and exacerbated quarterly revenue misses in recent quarters that may be tied to weaker demand and add-on sales. We are adjusting our estimates lower for FY16/17 on slower hospital adds. Our price target moves down from $26 to $25 as we now base our PT on 2018E EPS but lower our multiple due to increased attrition. Our MP rating stands."
Shares of Computer Programs and Systems closed at $25.45 yesterday.
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