Back to top

Analyst Blog

athenahealth Inc. (ATHN - Analyst Report) revealed that it has entered a strategic partnership with healthcare technology solutions provider Merge Healthcare Incorporated (MRGE - Analyst Report) to improve its electronic health record (EHR) services.

ATHN will use MRGE’s iConnect Network in its cloud-based platform that will help its clients have real time access to view exam results, diagnostic images and other critical information within the athenaClinicals EHR workflow. Following the announcement, athenahealth’s shares rose 1.0% yesterday.
    
The integration of iConnect Network into EHR workflow will improve communication between physicians and radiologists and reduce healthcare costs. It will also help healthcare providers to attest and receive incentives speedily and cost-effectively.

A few days back, athenahealth 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 company 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.

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 - Snapshot Report) and NuVasive, Inc. (NUVA - Snapshot Report). Both of them carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
FELCOR LODG… FCH 10.51 +3.80%
VASCO DATA… VDSI 13.65 +1.26%
OLD DOMINIO… ODFL 63.49 +1.20%
LENOVO GROU… LNVGY 27.18 +0.42%
GENTIVA HEA… GTIV 18.21 +0.33%