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3 Reasons Why You Should Invest in athenahealth (ATHN) Stock

athenahealth, Inc.ATHN is currently one of the top-performing companies in the MedTech space. The stock's bullishness reflects a rally in price price and strong fundamentals.

The stock has outperformed its industry over the last six months. athenahealth's shares have returned 7.4% against the industry's gain of 0.5%.

Notably, 16 estimates moved north for the current quarter in the last 60 days, versus no downward revision. During the same period, the Zacks Consensus Estimate surged 30.9% to earnings of 72 cents per share. The company sports a Zacks Rank #1 (Strong Buy), which indicates robust fundamentals and expectations of outperformance in the near term.

Therefore, if you haven't taken advantage of the share price appreciation yet, it's time you add the stock to your portfolio.

athenahealth, Inc. Price and Consensus

athenahealth, Inc. Price and Consensus | athenahealth, Inc. Quote

Why an Attractive Pick?

Strong Q4 Results

Last month, athenahealth reported promising fourth-quarter 2017 results, maintaining its streak of positive earnings surprises. Earnings beat the Zacks Consensus Estimate by a huge margin and increased a whopping 79% from the prior-year quarter.

Revenues surpassed the Zacks Consensus Estimate and increased 14.2% on a year-over-year basis. Applications like athenaClinicals, athenaClinicals-Streamlined, athenaInsight, athenaCommunicator, athenaOne, athenaCollector for Hospital and Health Systems and the brand promise of 'Unbreak Healthcare' drove the results.

Robust Fundamentals

2017 had been a major year for athenahealth since the company made significant efforts to serve rural hospitals by building a network-centric hospital service and discarding all the traditional software. The company exited 2017 with 62 hospitals, nearly doubling the number of hospitals from 2016.

Furthermore, in 2017, the company launched and rapidly expanded its patient record sharing capabilities with CommonWell and Carequality. It was done with a view to help providers exchange patient records with outside care sites and use those records to positively impact patient care.

Per management, 2017 has also been a year of platform investment and evolution. Moreover, as part of evolution to a microservice-based architecture, athenahealth also developed the first microservices in the year.

Solid Guidance

athenahealth issued a promising 2018 guidance at the 2018 Investor Summit. The company expects total revenues in the range of $1.31-$1.38 billion. Notably, the Zacks Consensus Estimate of $1.35 billion lies within this range.

Moreover, the company expects operating income in the band of $210-$235 million. Operating margin is expected in the range of 16-17% for 2018.

Other Picks

Other top-ranked stocks in the broader medical sector are Bio-Rad laboratories, Inc. (BIO , PetMed Express, Inc. PETS and Centene Corporation CNC . Each of these stocks carries a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

Bio-Rad has a long-term expected growth rate of 20%. The stock has gained 20.7% in the past six months.

PetMed has a long-term expected growth rate of 10%. The stock has rallied a whopping 130.4% in the past year.

Centene has a long-term expected growth rate of 14.4%. The stock has gained 14.4% in the past six months.

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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 Nasdaq, Inc.


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

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