Nextgen Healthcare (NASDAQ:NXGN) and Open Text (NASDAQ:OTEX) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.
Volatility and Risk
Nextgen Healthcare has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Open Text has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.
This table compares Nextgen Healthcare and Open Text’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings for Nextgen Healthcare and Open Text, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nextgen Healthcare currently has a consensus price target of $18.50, indicating a potential upside of 2.10%. Open Text has a consensus price target of $45.67, indicating a potential upside of 17.64%. Given Open Text’s stronger consensus rating and higher probable upside, analysts clearly believe Open Text is more favorable than Nextgen Healthcare.
Earnings & Valuation
This table compares Nextgen Healthcare and Open Text’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nextgen Healthcare||$531.02 million||2.21||$2.42 million||$0.57||31.79|
|Open Text||$2.82 billion||3.71||$242.22 million||$0.91||42.66|
Open Text has higher revenue and earnings than Nextgen Healthcare. Nextgen Healthcare is trading at a lower price-to-earnings ratio than Open Text, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
71.6% of Nextgen Healthcare shares are held by institutional investors. Comparatively, 68.2% of Open Text shares are held by institutional investors. 17.9% of Nextgen Healthcare shares are held by insiders. Comparatively, 10.6% of Open Text shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Open Text pays an annual dividend of $0.61 per share and has a dividend yield of 1.6%. Nextgen Healthcare does not pay a dividend. Open Text pays out 67.0% of its earnings in the form of a dividend. Open Text has increased its dividend for 4 consecutive years.
Open Text beats Nextgen Healthcare on 11 of the 17 factors compared between the two stocks.
About Nextgen Healthcare
NextGen Healthcare, Inc. provides software, services, and analytics solutions to medical and dental group practices in the United States. The company's principal products include NextGen Enterprise EHR, which stores and maintains clinical patient information; and a workflow module, prescription management, automatic document and letter generation, patient education, referral tracking, interfaces to billing and lab systems, physician alerts and reminders, and reporting and data analysis tools. Its products also comprise NextGen Enterprise PM, a practice management (PM) solution; and NextGen Office, a cloud-based electronic health record and PM solution. In addition, the company offers automation and workflow solutions, including NextGen Mobile Health Solutions, NextGen Electronic Healthcare Transactions, NextGen Pre-Service Clearance, and NextGen Patient Payment solutions. Further, it provides analytics, population health, and patient engagement solutions, such as NextGen Population Health Informed Analytics, NextGen Population Health Patient Care Coordination, NextGen Population Health Performance Management, and NextGen Patient Portal solutions. Additionally, the company offers NextGen Connected Health and NextGen Share interoperability solutions. It also provides professional services, including training, project management, functional and detailed specification preparation, configuration, testing, installation, support, and client services. It serves physician hospital and management service organizations, independent physician associations, accountable care organizations, ambulatory care centers, and community health centers through a sales force and reseller channel. NextGen Healthcare, Inc. has a strategic partnership with OTTO Health LLC. The company was formerly known as Quality Systems, Inc. and changed its name to NextGen Healthcare, Inc. in September 2018. NextGen Healthcare, Inc. was founded in 1974 and is headquartered in Irvine, California.
About Open Text
Open Text Corporation provides a suite of software products and services. The company offers content services; digital process automation, which enables organizations to transform into digital and data-driven businesses through automation; and discovery suite that provides forensics and unstructured data analytics for searching, collecting, and investigating enterprise data to manage legal obligations and risk. It also provides business network solutions comprising business-to-business integration services, such as secure mail, large file transfer, fax, and electronic data interchange within a single platform; analytics solutions; and forensic security and automated cyber risk management software service. In addition, the company provides customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it offers professional services, such as consulting and learning services relating for the implementation, training, and integration of its licensed product offerings into the customers' systems; and cloud services that allow its customers to make use of its OpenText software, services, and content over Internet enabled networks. The company serves organizations, mid-market companies, and government agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, Accenture plc, Deloitte Consulting LLP, and others. Open Text Corporation was founded in 1991 and is headquartered in Waterloo, Canada.
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