Shares of Quality Systems Inc., an Irvine maker of software that doctors and dentists use to manage their practices, rose slightly Wednesday after an analyst upgraded the company.
UBS analyst Donald Hooker raised his rating on Quality from “sell” to “neutral.” In a research note, Hooker wrote that he upgraded Quality because he saw progress in its software pipeline, increases in its sales force and success in cross-selling practice management and medical billing software.
Quality’s shares closed up slightly more than 2% with a market value of $1.7 billion.
Earlier this week, analyst Greg Bolan of Wells Fargo Securities upgraded Quality from “market perform” to “outperform.”
Bolan said he believed that economic stimulus-driven demand for electronic health records would significantly enhance growth for “well-established” vendors such as Quality, and that the company is positioned to achieve 30% year-over-year per-share profit growth during the next several years.
Analysts on average expect Quality to post a profit of $49.3 million on revenue of $292.2 million for the 12 months ending in March.
Quality Systems has been on a little buying spree lately. Last week, it announced the acquisition of a Texas maker of software for hospitals, doctors and medical laboratories.
Terms of the acquisition of Austin-based Opus Healthcare Solutions Inc. weren’t disclosed.
Quality Systems said it expects the Opus Healthcare acquisition to add to its profits in the 12 months through March 2011.
The company plans to combine Opus Healthcare with assets acquired last year from Laguna Hills-based Sphere Health Systems.
Quality bought software for managing patients, finance and human resources at hospitals from Sphere Health.
Opus Healthcare and Sphere’s software are becoming part of Quality’s dominant NextGen Healthcare Information Systems Inc. unit, which provides software for doctors.
The company said it plans to go after smaller hospitals with the combined software.
Last year, it also bought Hunt Valley, Md.-based Practice Management Partners Inc. and Healthcare Strategic Initiatives Inc. of St. Louis, to expand what it calls its revenue cycle business.
Revenue cycle uses software and computers for coding and documenting insurance claims to help doctors manage payments and cash flow.
