On May 9, we reiterated
) at Neutral based on its first quarter 2013 earnings results and
guidance for 2013.
On May 2, Athenahealth announced results for the reported
quarter. Its earnings per share of 16 cents beat the Zacks
Consensus Estimate of 12 cents per share. Revenues climbed 30%
year over year to $125.6 million in the quarter beating the Zacks
Consensus Estimate of $122 million. Excluding revenue of $5.5
million from the acquisition of Epocrates, sales were $120.1
million, up 24% year over year. The company posted collections of
$2.6 billion in the first quarter, up 23.8%.
Utilization of athenaCollector by medical providers and
physicians grew 20.7% and 19.7% respectively, year-over-year in
the first quarter. Furthermore, the use of athenaClinicals by
medical providers and physicians jumped 64% and 64.6%
respectively, year over year. The utilization of
athenaCommunicator increased almost two and a half times to
16,296 medical providers (of whom 11,840 were physicians) from
6,800 medical providers (of whom 4,820 were physicians) in the
Athenahealth updated its guidance for 2013. Total sales are
expected in the range of $580 million to $615 million (earlier
$525 million to $550 million). The band for Epocrates sales is
$46 million to $55 million while the Arsenal property is expected
to contribute $10 million of revenues by way of tenancy. The
company forecasts adjusted gross margin of 63% to 64% (earlier
62% to 63%) and adjusted operating income of $68 million to $80
million (earlier $75 million to $82 million). Athenahealth guided
to adjusted earnings per share of $1.05 to $1.15 (earlier $1.15
The Zacks Consensus Estimate for 2013 has dropped (over the
last 30 days) by 40.8% to 42 cents. The Zacks Consensus Estimate
for 2014 has dropped 20.4% to 82 cents during the same
Though fresh opportunities in health care information
technology may be shrinking, the replacement market has been
growing. Competition is fierce and larger competitors may benefit
from the incumbency factor. Industry stalwarts such as
) offer long-standing seamless products which integrate inpatient
and ambulatory-care systems.
Allscripts Healthcare Solutions, Inc.
) is another competitor in a crowded field.
We currently have a Zacks Rank #3 (Hold) on the company.
However, we are more positive about other stocks such as
Merge Healthcare Incorporated
) which carries a Zacks Rank #2 (Buy) and is expected to do
ATHENAHEALTH IN (ATHN): Free Stock Analysis
CERNER CORP (CERN): Free Stock Analysis
ALLSCRIPTS HLTH (MDRX): Free Stock Analysis
MERGE HEALTHCAR (MRGE): Free Stock Analysis
To read this article on Zacks.com click here.