NXGN - NextGen gets upgrade at Guggenheim on growth prospects

NextGen Healthcare (NASDAQ:NXGN) was upgraded at Guggenheim to Buy from Neutral with a new price target of $26, representing a potential ~32% upside. The firm noted that following NextGen's analyst day and follow-ups with management, it was convinced that the company's growth and margin story is sustainable beyond FY24 as NextGen (NXGN) moves towards its "Rule of 40" target. The firm noted that previously it saw no sustainable path to high-single-digit growth beyond FY24 once the ~$100M "Surround Solutions" opportunity was sold into the existing customer base. However, during the analyst day, the company's management gave additional information and insights into the business, breaking revenue sources into three areas — enterprise clients, office clients, and Insights. The chart below shows YTD price-return performance of NXGN and peers, Phreesia, Simulations Plus and American Well. The firm noted that it was raising its estimates and thinks that the stock will re-rate higher to trade more in line with faster-growing digital

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NextGen gets upgrade at Guggenheim on growth prospects