Analyzing Cotiviti (COTV) & Allscripts Healthcare Solutions (MDRX)

Allscripts Healthcare Solutions (NASDAQ: MDRX) and Cotiviti (NYSE:COTV) are both mid-cap healthcare companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Allscripts Healthcare Solutions has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Cotiviti has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Allscripts Healthcare Solutions -12.23% 6.53% 2.04%
Cotiviti 11.18% 7.68% 3.80%

Valuation and Earnings

This table compares Allscripts Healthcare Solutions and Cotiviti’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allscripts Healthcare Solutions $1.55 billion 1.65 $2.88 million ($1.16) -12.18
Cotiviti $625.16 million 4.79 $48.85 million $0.97 33.43

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Allscripts Healthcare Solutions and Cotiviti, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allscripts Healthcare Solutions 1 7 11 0 2.53
Cotiviti 0 3 6 0 2.67

Allscripts Healthcare Solutions presently has a consensus target price of $15.13, indicating a potential upside of 7.04%. Cotiviti has a consensus target price of $41.29, indicating a potential upside of 27.31%. Given Cotiviti’s stronger consensus rating and higher possible upside, analysts plainly believe Cotiviti is more favorable than Allscripts Healthcare Solutions.

Institutional and Insider Ownership

86.2% of Cotiviti shares are owned by institutional investors. 0.8% of Allscripts Healthcare Solutions shares are owned by company insiders. Comparatively, 15.8% of Cotiviti shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Cotiviti beats Allscripts Healthcare Solutions on 10 of the 14 factors compared between the two stocks.

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.

Cotiviti Company Profile

Cotiviti Holdings, Inc. is a provider of analytics-driven payment accuracy solutions. The Company focuses primarily on the healthcare sector. The Company operates through two segments: Healthcare, and Global Retail and Other. Through its Healthcare segment, the Company offers prospective and retrospective claims accuracy solutions to healthcare payers in the United States. The Company also provides analytics-based solutions unrelated to its healthcare payment accuracy solutions in the United States. Through its Global Retail and Other segment, the Company provides retrospective claims accuracy solutions to retailers primarily in the United States, Canada and the United Kingdom, as well as solutions that manage payment networks for a range of clients. The Company leverages its technology platform, configurable analytics, information assets and expertise in healthcare reimbursement to help its clients develop their claims payment accuracy.

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