* Prime takeover candidate: The market for electronic medical records is extremely crowded and ripe for takeover bids. Through its third quarter last year, Allscripts has continued to express guarded interest in a sale. The right acquisition would do much to give it a fresh start.
On the flip side:
* Lack of direction: With continuing changes in governance at the top, Allscripts doesn’t look like a company that knows where it’s going. That leaves it open to slashing attacks in hospital boardrooms by other vendors, who are, I can guarantee you, telling CEOs that Allscripts is too wobbly to be a steady partner.
* Sagging income: Allscripts lost ground in its third quarter ended Sept. 30, 2012, with $360.7 million in revenue falling slightly below 2011’s $363.7 million. More troublingly, Allscripts net income fell from $19.1 million, or $0.10 per share, in Q3 2011 to of $9.2 million, or $0.05 per share in Q3 2012.
So, is Allscripts worth a shot? Despite the troubles at the top and the admittedly shaky income numbers, I can’t see Allscripts doing worse and it could do a lot better (particularly if a well-financed competitor buys it, which I see as a strong possibility). Allscripts has a product with market traction, a history with buyers, resources and — from what I see — it’s gotten over the worst of the gyrations which made its 2012 such a colorful year. While I don’t anticipate immediate gains, I think Allscripts still has good mid-term potential and expect to see it either thrive or be acquired this year.
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