Athenahealth (ATHN) Stock Tumbles as Q2 Results Miss Estimates
NEW YORK (TheStreet) -- Shares of Athenahealth (ATHN) - Get Report are dropping 9.84% to $123.69 on heavy trading volume late Friday afternoon after the company reported weaker-than-expected results for the 2016 second quarter.
After yesterday's closing bell, the Watertown, MA-based company reported adjusted earnings of 34 cents per share, lower than analysts' estimates of 42 cents per share.
Revenue for the period was $261.9 million, which fell short of analysts' forecasts of $274.1 million.
For 2016, the company sees adjusted earnings per share between $1.65 and $1.85 on revenue of $1.085 billion to $1.115 billion. Analysts are looking for earnings of $1.80 per share on revenue of $1.12 billion.
Additionally, COO Ed Park will step down at year end. He is expected to be elected to the board of directors.
The stock was downgraded to "hold" from "buy" at Deutsche Bank following the results. The firm also cut its price target to $147 from $165.
"It is difficult to conceive of Athena approaching its 30% revenue growth target in the visible future. The Athena investment thesis is now largely tied to growth from the inpatient market, where we believe meaningful success remains years away," the firm wrote in an analyst note.
The company provides cloud-based services for healthcare and point-of-care mobile apps.
About 2.09 million of the company's shares were traded so far today compared to its average volume of 314,886 shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth.
But the team also finds that the company's cash flow from its operations has been weak overall.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ATHN