Ahead of the Bell: Athenahealth shares tumble
Athenahealth shares continue tumble following 2014 forecast release
Shares of Athenahealth Inc. slid in premarket trading Thursday, a day after the company forecast 2014 earnings and revenue that fell below analysts' consensus expectation.
Athenahealth, which provides online health record and medical practice services, said Wednesday that it expects adjusted earnings next year to range between 98 cents and $1.10 per share on $725 million to $755 million in revenue.
Analysts forecast on average earnings of $1.33 per share on $760.1 million in revenue, according to FactSet.
The company said it would elaborate on the forecast and its business Thursday morning during its annual investor meeting. Athenahealth's products include the athenaCollector billing product, athenaClinicals practice management software, and athenaCommunicator software.
Sterne Agee analyst Greg T. Bolan said the company's forecast fell below his estimate for $1.59 per share on $812 million in revenue.
The company's stock started sliding Wednesday after markets closed. In a research note entitled "Calm Down," Bolan said the forecast may take into account the underperformance of recently acquired the medical app maker Epocrates. He said he values that deal more for how it can help Athenahealth's brand recognition than for its revenue contribution.
Bolan also noted that the company's revenue growth is becoming more dependent on big national accounts, and it takes longer for these accounts to develop their claims volumes. The analyst said large national accounts secure revenue growth "over the long haul, and we do not believe it fair to penalize the company for solid bookings but now a longer backlog burn."
Company shares fell more than 7 percent, or $9.83, to $121.02 in premarket trading about a half hour before the market open. They had fallen as low as $110 in earlier premarket dealings. But the shares are still up 55 percent after closing 2012 at $73.29.
