Veradigm Inc.
MDRX Healthcare Health Information Services
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Veradigm Inc. (MDRX) Altman Z-score
Veradigm Inc.'s Altman Z-score for fiscal 2024 is 1.65, in the distress zone (below 1.81).
Altman Z-score, annual
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Annual newest first
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2024 | 1.65 | (0.99) |
| FY2023 | 2.64 | (1.09) |
| FY2022 | 3.73 | 1.33 |
| FY2021 | 2.39 | 0.70 |
| FY2020 | 1.70 | 0.94 |
| FY2019 | 0.76 | (0.29) |
| FY2018 | 1.05 | 0.29 |
| FY2017 | 0.76 | (0.02) |
| FY2016 | 0.78 | (1.04) |
| FY2015 | 1.82 | — |
How fiscal 2024’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | 0.09 | — | 0.11 | |
| Retained earnings / total assets | 0.30 | — | 0.42 | |
| EBIT / total assets | (0.14) | — | −0.48 | |
| Market value of equity / total liabilities | 1.92 | — | 1.15 | |
| Sales / total assets | 0.44 | — | 0.44 | |
| Altman Z-score | Distress zone | 1.65 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Grey zone | 2.15 | ||
Z and Z″ put Veradigm Inc. in different zones: distress zone by Z, grey zone by Z″.
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| HSTM HealthStream, Inc. compare | 3.5× |
| NRC National Research Corporation compare | 3.3× |
| MDRX Veradigm Inc. | 1.6× |
| WEAV Weave Communications, Inc. compare | 1.4× |
| PHR Phreesia, Inc. compare | 0.7× |
| CTEV Claritev Corporation compare | −0.4× |
| EVH Evolent Health, Inc compare | −0.4× |
| SOPH SOPHiA GENETICS SA compare | −3.4× |
| TDOC Teladoc Health, Inc. compare | −6.7× |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets