athenahealth, Inc. is currently one of the top performing stocks in the MedTech space. The company’s focus on big-data and a raised guidance for 2018 makes it a lucrative investment pick.
Year to date, shares of athenahealth have rallied 14.4% compared with the industry’s 11.9% rise. The current level is also higher than the S&P 500 index’s return of 8.8%.
This Zacks Rank #1 (Strong Buy) stock currently has a Growth Score of A. This reflects possibilities of outperformance over the long haul. Our research shows that stocks, with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), are better picks than most.
Which Way Are Estimates Treading?
For the current quarter, the Zacks Consensus Estimate for earnings per share is pegged at 98 cents, reflecting year-over-year growth of 75%. The same for revenues stands at $336.4 million, showing growth of 10.4% year over year.
For the current year, the Zacks Consensus Estimate for earnings per share is pinned at $4.17, showing growth of 68.2% over the last year. The same for revenues stands at $1.35 billion, showing growth of 10.4% from last year.
Let’s delve deeper.
Factors That Make It an Attractive Pick
Focus on Cloud-Based Services
athenahealth is a key player in the HCIT (Healthcare IT) space. The company’s cloud-based big data network — athenaNet — deserves a special mention here. Per management, there are nearly 116,000 providers on athenaNet currently.
Other notable platforms include athenaClinicals, the company’s first economically sustainable, service-based electronic medical records (EMR) system and athenaCollector. In the last reported quarter, the number of athenaCollector providers increased 15% year over year.
For 2018, athenahealth expects revenues in the range of $1.34-$1.37 billion, up from the previous guidance of $1.31-$1.38 billion.
The company expects adjusted operating income in the range of $244-$270 million, up from previous guidance of $210-$235 million.
Adjusted operating margin is expected in the band of 18.3-19.8% of net revenues for 2018, up from the previous guidance of 16-17%.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Integer Holdings has an expected growth rate of 12.6% for the next year. The stock carries a Zacks Rank #2.
Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.
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