I haven't seen a P/E this high since the internet bubble. The analysts keep low balling their estimates so the company looks like they beat every quarter but only 15% growth projected long term and an 800 p/e. Earnings would have to ten fold just for the stock to be at fair value.
i have posted twice now , and both have been deleted. all I'm posting is about competition , salesforce recent press release. would like to know other thoughts on this??
Market is nervous with China, currency war, FED... but ATHN is doing just fine with stock up 10% in recent weeks. Move along, nothing to see here....
Does anyone know how many of ATHN deals with new clients (small hospitals, large physician groups) involve stock options as incentives to do a deal? Where would that info be disclosed?
Still have not seen any attention given to this aspect of earnings quality anywhere, but in your post...
Canaccord Genuity reiterated a Hold rating and $125.00 price target on athenahealth (NASDAQ: ATHN) following 2Q15 results. Analyst Richard Close expects ATHN's differentiated cloud offerings to gain market share as physicians seek cost effective SaaS platforms.
Close commented, "As previously stated, we expect ATHN's differentiated cloud offerings to gain market share as physicians seek to replace 1st generation financial and clinical systems with cost effective SaaS platforms. This was evidenced by the NY-Presbyterian win. Our position to stay-on-the-sidelines with a HOLD rating was in large part related to waiting for success with the new hospital expansion strategy and we are encouraged by early results. With respect to 2H15, we do have some concern regarding ATHN's ability to meet doc add expectations (3QE 2,551 and 4QE 2,780) in order to drive '15 business services revenue of $915.9M. While Trinity and NY-Pres. should provide some contribution (Ascension Collector is completed), additional near-term wins will be needed."
Close also added, "We are raising our estimates following 2Q results (that beat our forecasts) to reflect mgmt commentary on guidance, with results expected at-or-above the mid-point of the range. We now project FY15 revenue of $915.9M (was $913.1M) and adj.-EPS of $1.23 (was $1.15). For FY16, we forecast revenue of $1.112B (was $1.098B) and adj.-EPS of $1.50 (was $1.46). In FY17 we now forecast revenue of $1.346B (was $1.328B) and adj.-EPS of $1.82 (was $1.77)."
For an analyst ratings summary and ratings history on athenahealth click here. For more ratings news on athenahealth click here.
athenahealth logoathenahealth (NASDAQ:ATHN) Director David Eric Robinson sold 10,000 shares of the stock in a transaction dated Friday, July 24th. The stock was sold at an average price of $130.00, for a total value of $1,300,000.00. Following the transaction, the director now directly owns 5,261 shares in the company, valued at approximately $683,930.
If you look at detailed income statement for recently reported Q2/15 quarter: operating loss of about 2.2 MM was offset by "other income" of about 21.0 MM. So ATHN is still not profitable. The 21.00 MM one-time, non-operating gain (from sell of an equity holding) just disguises this fact. Interesting that the analysts on conference call (at least the edited version of same that I read) did not even mention this one-time, non-operating gain that was was used by company to turn an operating loss into positive reported EPS....
this is a story stock and story stocks make the most difficult shorts. it makes no sense to try and rationalize based on earnings quality b/c even if earnings quality was pristine, the stock would still be outrageously valued. The whole Street rational is that ATHN is a SaaS company and that therefore traditional metrics like P/E are not relevant, only sales multiples.
I think the only way ATHN works as a short is if it becomes 100% clear to even the dumbest person that they will not penetrate the hospital market in a meaningful way. They have been able to score big deals in the physician market (Ascension) and while I have my doubts about the true profitability of these big deals, it just doesn't matter because its the announcements that drive the valuation. One can not underestimate the way that the CEO has managed the Street. He has done an absolutely amazing job and while to the cynical (me) he sounds like a circus barker, those who matter (the big institutions) apparently love the guy and they are believers. And believe me, big institutions are much dumber than actual industry people-they rely almost 100% on what management tells them which is where the CEO really shines. If the short case ever begins to be apparent there is so much air under the story, ATHN will be a safe short at $80 than it is at $130
The numbers were fine: Adjusted EPS (including stock based compensation) declined 33.3% on a year-over-year basis. Stock value goes up by half a billion USD.
It's certainly not on the numbers. The announcement was clearly timed to mask how bad these numbers are. I wish some of these analysts would talk to the folks who are actually using the product. How hard do think it's going to hit when one of these contracts backs out because of poor performance benchmarks and lack of interoperability. Epic dominates the hospital market and Athena is trying to go toe to toe with them. Just one bad day on "the cloud" and those contracts are done. There are no redundancies in place, and while it's good to see some increase in the R&D, they are so far behind the curve on improving the end-user adaptability to live clinical settings, I don't think it's enough to bring them up to speed to the where the competition is. They are still primarily a billing and collections service. That's it. Way overpriced.
...this is ridiculous. Did anybody actually look at the numbers? It's all smoke and mirrors. Decreased revenues, and declining transitions to other products that Athena previously had indicated would provide "organic growth". This is just madness. People are going to get hurt.
from reading street research, they basically ignore gaap and only focus on non gaap, which excludes the one-time gain as well as amortization and stock-based compensation. basically athn gets a pass to make up its earnings every quarter. pretty good deal. it really is interesting that the stock trades at over 100X pro forma, but the pro forma excludes some major recurring expenses like stock based compensation. the analysts justify the valuation by saying it's cheap at only 5X sales, but what is really hard to understand for me is numbers are numbers. The revenue growth is 21% and slowing and the earnings quality, including capitalized software, is less than great so I am not sure why someone should be willing to value this company so much higher than another company with identical numbers just because ATHN is supposedly a SaaS company. The CEO is very clever and has done a great job convincing the analysts that his company is different from every other company