Quality Systems, Inc. (QSII) Beats Earnings Estimates But Stock Still Tanks

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Shares of Quality Systems, Inc. (NASDAQ:QSII) are down big this morning despite the fact that the company reported an earnings beat. Third quarter fiscal 2016 earnings per share came in at $0.15 beating analysts’ expectations of $0.14 per share. Year-over-year revenues, however, declined and this evidently has caused investors to become a bit bearish.

Revenues saw a decrease of 5.2% year-over-year, coming in at $117 million, and missing Wall Street’s expectations of $125 million. Adjusted EPS remained unchanged year-over-year. This next quarter should be a big one for Quality Systems, Inc. (NASDAQ:QSII) as we see if they can make up some ground.

The stock is down 22.19% or $3.61 following the news, hitting $12.66 per share. About 1.08M shares traded hands or 77.33% up from the average. QSII has declined 2.92% since June 24, 2015 and is downtrending. It has outperformed the S&P500 by 7.28%.

From a total of 9 analysts covering Quality Systems Inc. (NASDAQ:QSII) stock, 3 rate it a “Buy”, 0 a “Sell”, and 6 a “Hold”. This means that 33% of the ratings are positive. The highest target price is $18 while the lowest target price is $14. The mean of all analyst targets is $15.83 which is 25.04% above today’s ($12.66) stock price. Quality Systems Inc. was the topic of 14 analyst reports since July 27, 2015 according to the firm StockzIntelligence Inc. Piper Jaffray upgraded shares on January 25 to a “Overweight” rating. Raymond James upgraded QSII stock in a recent report from January 4 to a “Outperform” rating. Finally, Jefferies reinitiated the stock with a “Hold” rating in a report they issued on an October 16.

The institutional sentiment decreased to 0.95 in Q2 2015. It’s down 0.37, from 1.32 in 2015Q2. The ratio dived, as 28 funds sold all their Quality Systems, Inc. shares they owned while 57 reduced their positions. 17 funds bought stakes while 64 increased their total positions. Institutions now own 37.11 million shares which is 12.24% less than the previous share count of 42.29 million in 2015Q2.

Westerly Capital Management Llc holds 2.17% of its total portfolio in Quality Systems, Inc., equating to 145,000 shares. 1492 Capital Management Llc owns 179,477 shares representing 1.59% of their total US portfolio. Moreover, Brown Capital Management Llc has 1.18% of their total portfolio invested in the company, equating to 5.52 million shares. The Massachusetts-based North Tide Capital Llc has a total of 1.11% of their portfolio invested in the stock. Aimz Investment Advisors Llc, a California-based fund reported 67,664 shares owned.

Quality Systems, Inc. is engaged in developing and marketing healthcare information systems that automate certain aspects of medical and dental practices, networks of practices such as physician hospital organizations and management service organizations (MSOs), accountable care organizations, ambulatory care centers, community health centers and medical and dental schools along with systems implementation, maintenance and support and add-on complementary services, such as revenue cycle management (RCM) and electronic data interchange (EDI). The company has a market cap of $770.53 million. The Firm operates in four divisions: QSI Dental Division, NextGen Division, Hospital Solutions Division and RCM Services Division. It has 24.07 P/E ratio.