A physician writing illegibly on a prescription pad and a nurse making notations in a paper chart are images that have become so familiar that we may not realize what they symbolize: an industry that has been woefully slow to adopt technology.

In today’s automated, digitized world, health care stands out as one of the last holdouts of paper-based records. But that is changing rapidly as more and more physician practices adopt electronic medical record technologies like those made by Quality Systems Inc. (Nasdaq:QSII).

Quality Systems of Irvine, Calif. makes technology for doctor and dentist offices to electronically manage patient records, as well as their overall practices. The growth the company has seen in recent years indicates just how pent up demand for this kind of product has been. Revenue grew to $186.5 million in fiscal 2008, from $157.2 million in 2007 and $119.3 million in 2006. Net income has come close to doubling over that same time frame, totaling $40.1 million in 2008, up from $33.2 million in 2007 and $23.3 million in 2006.

In April, JMP Securities analyst Constantine Davides initiated coverage of the company’s stock with an “outperform” rating, and has since then increased his price target to $38 from $35, noting that, in a crowded field of players trying to enter this nascent industry, Quality Systems had earned a reputation for a solid product.

Such a target would put Quality Systems shares above their closing price Wednesday of $31.25, but well off a 52-week high of more than $45. This stock has been volatile, swinging between $26.08 and $45.35 over the past year, but showing little sustained change since Jan. 1. In fact, after falling 4.5% Tuesday on news that its CEO Lou Silverman was resigning for undisclosed reasons, Quality Systems was on Tuesday slightly below the $30.95 level where it started the year.

In a recent research note, JMP Securities’ Davides wrote that he expects Quality Systems “to continue to capture market share among mid- and large-sized physician practices.”

He is not the only one trumpeting the company’s promise. The company has won coverage from a large group of financial analysts who understand the electronic medical records industry is ripe for growth, and view Quality Systems as one of the most promising players. More than 10 analysts (I say more than 10 here because the number varies depending on what year, etc. being forecast, but is always more than 10) who follow the company project revenue will rise to $230.2 million in 2009 and to $269.8 million in 2010, from $186.5 million in fiscal 2008. Their average earnings estimate is for net income of $1.68 per share in 2009 and $2.01 per share in 2010, versus $1.44 in 2008.

In immature and fast-growing businesses such as electronic medical records, where so many companies are chasing the opportunity, it can be challenging to separate the winning technologies from the wannabes. Quality Systems, however, has been widely recognized for its proven track record serving more than 30,000 doctors across some 1,500 physician practices.

The company is also working aggressively to grow its business. After several years of strictly in-house growth and development, the company in May announced plans to buy Healthcare Strategic Initiatives, a revenue management business that provides doctors’ offices with accounting and billing services, which should help Quality Systems expand its services.

Unfortunately for investors, Quality Systems has a number of risk factors offsetting its strong growth outlook. Because the industry it serves is so young, it remains wide open to competitors. Furthermore, potential changes in U.S. health-care policies loom as a big question mark that could limit the amount doctors are willing or able to invest on new technologies.

And, while many analysts believe the company’s stock is undervalued, it has a history of volatility that will make it difficult for investors to know whether they are catching it on the way up, or the way down. Although Quality Systems’ recent fourth-quarter results showed a 14% rise in revenues and a 32% increase in net income, that was actually less than some forecasts and led some analysts to cut their price targets on the stock. Quality Systems is not a story of slow and steady growth, but one of strong but somewhat unpredictable growth, which could prove insufficient to support its stock price.

It doesn’t help that management has a practice of not providing guidance. And speaking of management, a look at the company’s board and executive team leave still more reasons for concern. It is not clear why Silverman is stepping down now, after seven years as CEO, but times of transition can prove distracting to companies and are generally not a good time for investors to buy. For Quality Systems, the CEO departure follows a curious incident in May in which one of the company’s directors threatened to take legal action against other directors, claiming that the board lacked transparency and that its meeting minutes were “inaccurate, incomplete and misleading.”

Maybe all this management turmoil will blow over, though and Quality Systems will continue to enjoy robust growth.