UPDATE: Oppenheimer Starts HMS Holdings (HMSY) at Outperform

(Updated - June 18, 2015 9:00 AM EDT)

Oppenheimer initiated coverage on HMS Holdings (NASDAQ: HMSY) with an Outperform rating and a price target of $20. Analyst Mohan Naid noted strength in its commercial segment.

Naid explained, "HMSY remains volatile on RAC news flow but core non-RAC business (State and Commercial) continues to deliver strong results. While the RAC awards continue to drag on, we believe we are moving closer to the awards. Despite any changes in the actual contract terms, actual awards will likely move the company’s numbers substantially higher. Meanwhile, the two remaining segments continue to perform well. Commercial segment continues to take share and can sustain 20% growth fueled by increasing lives from ACA and increased product penetration. While renewals in state business is making investors nervous, we believe that HMSY’s track record and incumbent status positions the company well in renewals."

For an analyst ratings summary and ratings history on HMS Holdings click here. For more ratings news on HMS Holdings click here.

Shares of HMS Holdings closed at $17.67 yesterday.

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