Near Fair Value for TriZetto
A Hold recommendation has recently been issued to medical information provider The TriZetto Group, Inc. (TZIX) by Zacks medical technology analyst Tom Park. Here's what his latest update said:
'TZIX is scheduled to report Q3 results on October 30. Management previously reiterated its FY07 guidance.
'In addition to strong revenue growth and expanding gross margins, earnings growth is being driven by lower SG&A due to the McKesson settlement that eliminated the associated legal costs. At its current price of $16.84 per share, TZIX is trading at roughly 24x our 2008 earnings estimate of $0.69 per share, which is roughly in-line to the peer group average P/E multiple but roughly at a discount 1.0x P/E/G to the group average of 1.1x.
'The CareKey, PDM, and QCSI acquisitions provide the company substantial opportunities, and we believe the stock continues to deserve a premium valuation. At roughly 26x our 2008 EPS estimate or around a 1.0x P/E/G, our price target remains at $18.00. Against this backdrop, we continue to rate the stock as a Hold.'
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