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AthenaHealth (ATHN) Hits New Lifetime High Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified AthenaHealth ( ATHN) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified AthenaHealth as such a stock due to the following factors:

  • ATHN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $87.7 million.
  • ATHN has traded 221,124 shares today.
  • ATHN is trading at a new lifetime high.

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More details on ATHN:

athenahealth, Inc., a business services company, provides ongoing billing, clinical-related, and other related services to medical group practices primarily in the United States. The company provides services through the athenaNet, a proprietary Internet-based practice management application. ATHN has a PE ratio of 294.9. Currently there are 5 analysts that rate AthenaHealth a buy, 3 analysts rate it a sell, and 13 rate it a hold.

The average volume for AthenaHealth has been 470,100 shares per day over the past 30 days. AthenaHealth has a market cap of $4.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.65 and a short float of 29.7% with 12.26 days to cover. Shares are up 47.5% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AthenaHealth as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 41.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, ATHN's share price has jumped by 32.87%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The gross profit margin for ATHENAHEALTH INC is rather high; currently it is at 61.05%. Regardless of ATHN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATHN's net profit margin of -8.49% significantly underperformed when compared to the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Technology industry and the overall market, ATHENAHEALTH INC's return on equity significantly trails that of both the industry average and the S&P 500.

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