athenahealth Up to Buy on High EHR Adoption
On Sep 17, Zacks Investment Research upgraded athenahealth, Inc. (ATHN) by a notch to a Zacks Rank #2 (Buy).
Why the Upgrade?
This leading provider of cloud-based services and mobile tools for medical groups and health systems has been witnessing an increased adoption of its electronic health record (:EHR), revenue cycle management and patient engagement services.
Recently, the University of Toledo selected athenahealth's suite of cloud-based services to advance connectivity, drive efficiency, and support population health initiatives. Earlier in July, New Haven Community Medical Group, one of the largest independent physician associations in Connecticut, also selected athenahealth as one of its preferred health information technology vendors.
Moreover, according to a publication by the Centers for Medicare and Medicaid Services, athenahealth led the healthcare industry in Meaningful Use Stage 2 attestations in the month of June.
athenahealth has also been enjoying rising earnings estimate revisions. For fiscal 2014, two estimates moved north over the last 60 days with no negative revision, causing the Zacks Consensus Estimate to move up 8.0% to its current level of 27 cents.
Also, for fiscal 2015, two estimates moved up over the same time frame with no revision in the opposite direction, raising the Zacks Consensus Estimate by 4.8% to 44 cents per share.
The company also clocked positive earnings surprises in three of the last four quarters, reflecting an average surprise of 350% in the last reported quarter.
In the second quarter of 2014, athenahealth posted adjusted earnings of $3.7 million or 9 cents per share in stark contrast to a loss of $9.3 million or 25 cents per share in the same quarter of 2013. Revenues in the quarter rose 27.1% to $185.9 million and edged past the Zacks Consensus Estimate of $182 million.
For full-year 2014, athenahealth projects revenues of $725 to $755 million. The current Zacks Consensus Estimate of $746 million lies within the company’s projected band. For the full year, athenahealth also provides adjusted net earnings per share guidance of 98 cents to $1.10, which is much higher than the Zacks Consensus Estimate.
The long-term expected earnings growth rate for athenahealth stands higher at 22.7% compared with industry growth of 18.7%.
Other Stocks to Consider
Other well-performing stocks include Merge Healthcare Incorporated (MRGE) and Omnicell, Inc. (OMCL) in the medical information systems industry and Alphatec Holdings, Inc. (ATEC) in the medical instruments industry. While Alphatec sports a Zacks Rank #1 (Strong Buy), both Merge Healthcare and Omnicell carry a Zacks Rank #2 (Buy).
Read the Full Research Report on ATHN
Read the Full Research Report on OMCL
Read the Full Research Report on MRGE
Read the Full Research Report on ATEC
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