Markets

athenahealth (ATHN) Beats on Q4 Earnings, Misses Revenues

athenahealth Inc.ATHN reported adjusted earnings of 42 cents per share, which beat the Zacks Consensus Estimate of 27 cents. However, the figure came below 45 cents posted in the year-ago quarter.

The Watertown, MA based maker of billing and medical practice management software posted revenues of $288.2 million, which missed the Zacks Consensus Estimate of $304.0 million but increased 12% from $257.5 million on a year-over-year basis.

Stock Performance

Over the last three months, the stock added 20.18%, comparing favorably with the Zacks classified Medical Information Systems sub-industry's gain of 4.52%. Also, a long-term expected earnings growth rate of 26.25% instills confidence in investors.

Quarter Highlights

athenahealth reported Business and Services revenues of $278.9 million, up 12.5% from the year-ago quarter. However, implementation and other segment posted revenues of $9.3 million, down 3.1% from the same quarter last year.

A strong client base has been a major growth driver for the company. Applications like athenaClinicals, athenaClinicals-Streamlined, athenaInsight, athenaCommunicator, athenaOne, athenaCollector for Hospital and Health Systems and the brand promise of 'Unbreak Healthcare' are fortifying its market position in terms of exclusiveness of services provided in the respective markets.

Physician Details

athenahealth's huge client base and solid network expansion are its major positives. In the reported quarter, the company registered 1,366 new active physicians in athenaCollector compared with 2,148 in the year-ago quarter, 1,573 physicians in athenaClinicals compared with 1,126 and 2,009 physicians in athenaCommunicator compared with 1,965.

In the reported quarter, net new active providers added to the network comprised 2,226 athenaCollector providers, 2,288 athenaClinicals providers, and 3,074 athenaCommunicator providers compared with 3,102, 1,613 and 2,835 respectively in the same period last year.

Financial Condition

Cash and cash equivalents were $147.4 million at the end of 2016 compared with $141.9 million at 2015 end. Long-term debt was $18.3 million compared with the 2015-end level of $10.8 million.

Guidance

For 2017, athenahealth maintained the total revenue projection at $1.290-$1.330 billion. Adjusted operating income is expected between $170 million and $190 million. Annual bookings are expected at $400 million to $450 million.

athenahealth, Inc. Price, Consensus and EPS Surprise

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

Key Picks

Currently, athenahealth carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical sector include Envision Healthcare Corporation EVHC , Avinger, Inc. AVGR and Inogen, Inc INGN . Notably, Inogen sports a Zacks Rank #1 (Strong Buy) while Envision Healthcare and Avinger carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Envision Healthcare has a long-term expected earnings growth rate of approximately 13.6%. Notably, the stock clocked an impressive one-year return of 224.7%.

Avinger projects sales growth of 2.3% for the current year. Additionally, the company posted a positive earnings surprise of 27% in the last quarter.

Inogen has a long-term expected earnings growth rate of approximately 17.5%. Notably, the stock registered an impressive one-year return of 95.5%.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks - absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

athenahealth, Inc. (ATHN): Free Stock Analysis Report

Inogen, Inc (INGN): Free Stock Analysis Report

Avinger, Inc. (AVGR): Free Stock Analysis Report

Envision Healthcare Corporation (EVHC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

INGN AVGR

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More