HealthEquity (NASDAQ: HQY) and Allscripts Healthcare Solutions (NASDAQ:MDRX) are both mid-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Volatility and Risk

HealthEquity has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500. Comparatively, Allscripts Healthcare Solutions has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Profitability

This table compares HealthEquity and Allscripts Healthcare Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HealthEquity 20.27% 14.54% 13.84%
Allscripts Healthcare Solutions -11.54% 5.97% 1.96%

Valuation & Earnings

This table compares HealthEquity and Allscripts Healthcare Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HealthEquity $189.78 million 13.89 $57.61 million $0.67 65.60
Allscripts Healthcare Solutions $1.66 billion 1.45 $160.09 million ($1.06) -12.59

Allscripts Healthcare Solutions has higher revenue and earnings than HealthEquity. Allscripts Healthcare Solutions is trading at a lower price-to-earnings ratio than HealthEquity, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for HealthEquity and Allscripts Healthcare Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HealthEquity 0 1 11 0 2.92
Allscripts Healthcare Solutions 1 7 9 0 2.47

HealthEquity presently has a consensus target price of $49.75, suggesting a potential upside of 13.20%. Allscripts Healthcare Solutions has a consensus target price of $14.47, suggesting a potential upside of 8.36%. Given HealthEquity’s stronger consensus rating and higher possible upside, analysts clearly believe HealthEquity is more favorable than Allscripts Healthcare Solutions.

Insider and Institutional Ownership

91.9% of HealthEquity shares are owned by institutional investors. 29.0% of HealthEquity shares are owned by company insiders. Comparatively, 0.8% of Allscripts Healthcare Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

HealthEquity beats Allscripts Healthcare Solutions on 11 of the 13 factors compared between the two stocks.

HealthEquity Company Profile

HealthEquity, Inc. provides a range of solutions for managing healthcare accounts (Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs)) for health plans, insurance companies and third-party administrators. The Company is engaged in technology-enabled services platforms that allow consumers to make healthcare saving and spending decisions. Its platform provides an ecosystem where consumers can access their tax-advantaged healthcare savings, compare treatment options and pricing, evaluate and pay healthcare bills, receive personalized benefit and clinical information, earn wellness incentives and make educated investment choices to help in their tax-advantaged healthcare savings. Its products and services include healthcare saving and spending platform, health savings accounts, investment advisory services, reimbursement arrangements and healthcare incentives. Its ecosystem primarily consists of HSA.

Allscripts Healthcare Solutions Company Profile

Allscripts Healthcare Solutions, Inc. (Allscripts) delivers information technology (IT) solutions and services to help healthcare organizations. The Company operates through three segments: Clinical and Financial Solutions, Population Health, and Netsmart. The Clinical and Financial Solutions segment includes the sale of integrated clinical software applications and financial and information solutions. The Population Health segment includes the sale of health management and coordinated care solutions, which focus on hospitals, health systems, other care facilities and accountable care organizations (ACOs). The Netsmart segment provides software and technology solutions to the health and human services industry, which includes behavioral health, addiction treatment, intellectual and developmental disability services, child and family services and public health segments, as well as to post-acute home care organizations.

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