Athenahealth: Health Care Losers

NEW YORK ( TheStreet) -- Shares of Athenahealth ( ATHN) are diving on Thursday afternoon, the day of its annual investor outlook event, where the company provided an earnings outlook below the Street consensus for 2011.

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Athenahealth is the most volatile stock in the niche health care information sector.

It traded as high as $47 early in 2010 before cratering to as low as $22 after failing to meet earnings expectations. It has since rebounded above the $40 mark in the past few months after finally delivering a excellent third quarter.

It's long been a favorite of shorts in the health care sector for its aggressive targets, and that short trade worked out well in the first half of 2010, after Athenahealth failed to deliver on the aggressive expectations it had set at last year's version of the annual investor day, in December 2009.

Athenahealth shares fell around 8% on Thursday afternoon and trading volume spiked to quadruple its average daily volume. The stock dive began as Athenahealth CFO Tim Adams was making his financial presentation at the annual investor event.

The health care information company expects 2011 earnings per share in a range between 68 cents and 75 cents. The Street consensus for 2011 is 85 cents.

Athenahealth's revenue guidance for 2011 is in line with expectations, at $300 million to $315 million. The Street consensus is $309 million.

Athenahealth CEO Jonathan Bush, first cousin of President George W. Bush, is among the more outspoken corporate CEOs, referring to the Street guidance game as a "kabuki ritual" that he won't play.

Athenahealth got into trouble in the first half of this year for failing to meet its goal of 30% top line growth and 40% bottom line growth. In a recent interview with TheStreet Bush said that even after the experience, he wasn't changing his approach of setting aggressive goals.

CFO Tim Adams was brought in this year to communicate more directly with the Street in terms of the company's financial message.

The mid-point of Adams' 2011 guidance is for growth of 26% in revenue, below the existing Athenahealth aggressive target. The company has spent heavily on building its sales force in the past few years and expects to keep its spending on sales and branding, in particular, at a consistent level as it tries to take more share away from the software-based companies in the health care information game.

The company is unique in the health care information space, being a cloud-computing competitor to the more established software-based companies like Cerner ( CERN) and Allscripts ( MDRX).

-- Written by Eric Rosenbaum from New York.

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