A month has gone by since the last earnings report for athenahealth, Inc. . Shares have added about 10.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
athenahealth Earnings, Revenues Miss Estimates in Q1
Watertown, MA-based maker of billing and medical practice management software, athenahealth Inc. reported adjusted earnings of $0.10 per share in the first quarter of fiscal 2017. This missed the Zacks Consensus Estimate by $0.01. In fact, the figure declined almost 9% on a year-over-year basis.
The company posted revenues of $285.4 million, which also missed the Zacks Consensus Estimate of $297 million but increased 11.3% on a year-over-year basis.
Quarter in Detail
athenahealth reported Business and Services revenues of $278.3 million, up 12.4% from the year-ago quarter. However, implementation and other segment posted revenues of $7.1 million, down 17.4% from the same quarter last year.
A strong client base has been a major growth driver for the company. Adjusted gross margin in the first quarter was 61.7% of net revenues, compared to 62.0% a year ago.
Coming to operating margins, the company registered a margin of 7.7% of total revenue in the first quarter, compared to 9.4% in the year-ago quarter.
We believe applications like athenaClinicals, athenaClinicals-Streamlined, athenaInsight, athenaCommunicator, athenaOne, athenaCollector for Hospital and Health Systems are fortifying its market position.
Per management, the company expanded its network across ambulatory, hospital and population health platforms. The company’s network has grown to over 99,000 providers, 88 million patient records, and 2.8 million covered lives at the end of first quarter. Buoyed by stellar network expansion, the company is expected to drive long-term revenue and earnings growth over the long haul.
Guidance
For fiscal 2017, the company expects revenues in the band of $1,210–$1,250 million.
Adjusted operating income is projected in the range of $120–$140 million. Annual bookings for the fiscal are expected at around $350–$400 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, athenahealth's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.
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Why Is athenahealth (ATHN) Up 10.4% Since the Last Earnings Report?
A month has gone by since the last earnings report for athenahealth, Inc. . Shares have added about 10.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
athenahealth Earnings, Revenues Miss Estimates in Q1
Watertown, MA-based maker of billing and medical practice management software, athenahealth Inc. reported adjusted earnings of $0.10 per share in the first quarter of fiscal 2017. This missed the Zacks Consensus Estimate by $0.01. In fact, the figure declined almost 9% on a year-over-year basis.
The company posted revenues of $285.4 million, which also missed the Zacks Consensus Estimate of $297 million but increased 11.3% on a year-over-year basis.
Quarter in Detail
athenahealth reported Business and Services revenues of $278.3 million, up 12.4% from the year-ago quarter. However, implementation and other segment posted revenues of $7.1 million, down 17.4% from the same quarter last year.
A strong client base has been a major growth driver for the company. Adjusted gross margin in the first quarter was 61.7% of net revenues, compared to 62.0% a year ago.
Coming to operating margins, the company registered a margin of 7.7% of total revenue in the first quarter, compared to 9.4% in the year-ago quarter.
We believe applications like athenaClinicals, athenaClinicals-Streamlined, athenaInsight, athenaCommunicator, athenaOne, athenaCollector for Hospital and Health Systems are fortifying its market position.
Per management, the company expanded its network across ambulatory, hospital and population health platforms. The company’s network has grown to over 99,000 providers, 88 million patient records, and 2.8 million covered lives at the end of first quarter. Buoyed by stellar network expansion, the company is expected to drive long-term revenue and earnings growth over the long haul.
Guidance
For fiscal 2017, the company expects revenues in the band of $1,210–$1,250 million.
Adjusted operating income is projected in the range of $120–$140 million. Annual bookings for the fiscal are expected at around $350–$400 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
athenahealth, Inc. Price and Consensus
athenahealth, Inc. Price and Consensus | athenahealth, Inc. Quote
VGM Scores
At this time, athenahealth's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are expecting a below average return from the stock in the next few months.