Street Estimates for Quality Systems (NASDAQ:QSII) May Be Too High

While Auriga likes what they see with Quality Systems (NASDAQ:QSII), especially with the electronic health record trend, they believe some investors could get carried away on what they believe is a too aggressive estimate from the Street.

Auriga said, "We are increasing our price target on QSII to $73 based on multiple expansion within the healthcare IT sector. Our recent investor meetings with management lead us to believe that the company is well-positioned to exploit the electronic health record (EHR) wave, which effectively kicks off in 10 days as the January 1, 2011 window opens for physician offices to qualify for stimulus incentives. One word of caution as we look to calendar 2011 is that Street estimates look aggressive to us. Fortunately for QSII (at least so far), the stock has demonstrated great resiliency - making new highs despite missing three consecutive quarters. Our HOLD rating stems from valuation."

Quality Systems closed Wednesday at $70.40, down $0.90, or 1.26 percent. Auriga raised their price target on them from $63 to $73.