Cantor starts Computer Programs with Overweight on RCM shift

Cantor Fitzgerald analyst Sarah James initiated coverage of Computer Programs & Systems with an Overweight rating and $24 price target. The stock’s current multiple does not reflect the company’s shift to a majority revenue cycle management business, the potential to upsell into existing electronic health record clients, or the enhanced need of community hospitals to efficiently outsource functions in a challenging margin environment, the analyst tells investors in a research note. The firm believes the integration of the Health Resource Group acquisition and growth in the internal sales force to drive pipeline expansion, cross-selling, and revenue growth. It says “multiple avenues” for sales growth could drive Computer Program back to double-digit growth exiting 2024 from 5% in 2023.