athenahealth Inc. (ATHN): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


athenahealth reported a better-than-expected third quarter of 2014. Although earnings of $0.07 per share were almost halved from $0.14 reported in the year-ago quarter, it managed to beat the Zacks Consensus Estimate by $0.01. Revenues surged 25.7% year over year and were in line with the consensus mark. Most importantly, the company continued to add physicians' at all three software suites. athenahealth reiterated its full-year 2014 revenue and earnings guidance and provided a conservative 2015 outlook. We believe that the company's strong product portfolio, growing physician base and solid business model are key tailwinds. However, lack of enterprise-sized deals, winding up of government funded stimulus and increasing competition are major concerns in the near term. We maintain our Neutral recommendation and set a price target of $140.00.


Headquartered in Watertown, MA, athenahealth Inc (ATHN) through its cloud-based network athenaNet provides services that manage the administrative duties of medical providers. The company's software platform handles billing management, quality measurement and reporting, clinical documentation and data exchange, patient communication and referrals, and many other related tasks.

athenahealth posted revenues of $595 million in fiscal 2013. In the nine months ended Sep 30, 2014, revenues jumped 27.4% year over year to $539.4 million. athenahealth reports revenues in two segments: Business Services (95% of total revenues in the nine months) and Implementation and Other (5%).

Business Services revenue is typically 2% to 8% of a practice's total collections, depending upon the services purchased, the size, complexity, and other characteristics of the practice, plus a per statement charge for certain billing statements that are generated for patients.

The Business Services segment comprises athenaCollector (revenue cycle management or RCM), athenaClinicals (electronic health record management or EHR), athenaCommunicator (patient communication management), athenaCoordinator (referral cycle management) and subscriptions, sponsored clinical information, and decision support services for point of care clinical application (Epocrates).

Epocrates was acquired by athenahealth in Mar 2013. The company offers subscription-based and sponsored clinical information and decision support services under this brand.

Implementation revenues consist of amortization of deferred revenue on implementation services, as well as third-party tenant and other non-core revenues.

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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, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: ATHN

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