TSC Ratings' Updates: Athenahealth

Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.

The following ratings changes were generated on Wednesday, March 25.

We've downgraded Athenahealth(ATHN Quote), which provides Internet-based business services for physician practices in the U.S., from hold to sell.

The company reported significant earnings-per-share improvement in the most recent quarter compared with the same quarter a year ago, though we anticipate underperformance relative to its pattern over the past year of positive EPS growth. Athenahealth's gross profit margin of 59.1% has increased from the year-ago quarter, and its 49.7% net profit margin outperformed the industry average. Net operating cash flow increased 71.8% to $6.4 million compared with the year-ago quarter. ...