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

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cotiviti 13.86% 13.61% 6.62%
Allscripts Healthcare Solutions -12.23% 6.53% 2.04%

Insider and Institutional Ownership

86.2% of Cotiviti shares are owned by institutional investors. 15.8% of Cotiviti shares are owned by company insiders. Comparatively, 0.9% of Allscripts Healthcare Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cotiviti $625.16 million 4.75 $48.85 million $0.98 32.81
Allscripts Healthcare Solutions $1.55 billion 1.65 $2.88 million ($1.16) -12.23

Cotiviti has higher earnings, but lower revenue 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 Ratings

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

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

Cotiviti presently has a consensus price target of $41.29, suggesting a potential upside of 28.42%. Allscripts Healthcare Solutions has a consensus price target of $15.13, suggesting a potential upside of 6.59%. Given Cotiviti’s stronger consensus rating and higher possible upside, analysts clearly believe Cotiviti is more favorable than Allscripts Healthcare Solutions.

Summary

Cotiviti beats Allscripts Healthcare Solutions on 10 of the 13 factors compared between the two stocks.

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.

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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