athenahealth Guides Higher Revs, Lower EPS - Analyst Blog


athenahealth Inc. ( ATHN ) reaffirmed its revenues, margins and earnings guidance for 2013 and released its 2014 guidance where it anticipates higher revenues but lower earnings per share.

For 2013, the leading Electronic Health Record (EHR) provider continues to expect revenues between $580 million and $615 million, adjusted gross margin between 63 and 64%, adjusted operating income between $68 and $80 million, and adjusted earnings per share between $1.05 and $1.15. The adjusted figures exclude non-recurring items and stock-based compensation.      

For 2014, ATHN expects revenues between $725 million and $755 million, adjusted gross margin between 62.5 and 63.5%, adjusted operating income between $70 and $80 million, and adjusted earnings per share between 98 cents and $1.10.

Following the announcement, athenahealth's shares slipped 3.2% to $126.60 on Dec 12 but regained 3.7% to $131.31, after the market closed last Friday. The regain can be attributable to optimism triggered by ramp up of its enterprise accounts and successful implementation of Meaningful Use Stage 2 (MU2) criteria across its cloud-based network in the U.S.

athenahealth reported adjusted earnings of $8.0 million or 21 cents per share (excluding amortization and integration and transaction costs) in the third quarter of the year, exceeding the Zacks Consensus Estimate of 15 cents per share. This translated into a 15.5% rise in net earnings from $7.0 million and 10.5% rise in earnings per share from 19 cents in the comparable quarter a year ago.

Revenues in the quarter surged 43.1% to $151.5 million but missed the Zacks Consensus Estimate of $155 million. Excluding Epocrates and other revenues (consisting of third-party tenant revenues) totaling $17.2 million, core athenahealth revenues rose 27% to $134.3 million. Growth was led by expanded clientele for the company's offerings since the acquisition of Healthcare Data Services and strong athenaCoordinator business.

Currently, ATHN carries a Zacks Rank #3 (Hold). While we prefer none of the stocks from the medical information systems industry at this moment, we can consider some better-ranked stocks from the medical products industry such as Bio-Rad Laboratories, Inc. ( BIO ), Hill-Rom Holdings, Inc. ( HRC ), and Advaxis, Inc. ( ADXS ). While Bio-Rad Laboratories and Hill-Rom Holdings carry a Zacks Rank #1 (Strong Buy), Advaxis carries a Zacks Rank #2 (Buy).

ADVAXIS INC (ADXS): Get Free Report

ATHENAHEALTH IN (ATHN): Free Stock Analysis Report

BIO-RAD LABS -A (BIO): Free Stock Analysis Report

HILL-ROM HLDGS (HRC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ADXS , ATHN , BIO , HRC

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