AthenaHealth Inc. (ATHN): Today's Featured Diversified Services Winner

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

AthenaHealth ( ATHN) pushed the Diversified Services industry higher today making it today's featured diversified services winner. The industry as a whole closed the day up 0.1%. By the end of trading, AthenaHealth rose 90 cents (1%) to $87.91 on light volume. Throughout the day, 241,697 shares of AthenaHealth exchanged hands as compared to its average daily volume of 500,600 shares. The stock ranged in a price between $86.49-$89.01 after having opened the day at $86.58 as compared to the previous trading day's close of $87.01. Other companies within the Diversified Services industry that increased today were: Net one Ueps Technologies ( UEPS), up 14.3%, Spar Group ( SGRP), up 7.9%, General Employment ( JOB), up 7.7%, and Ambow Education ( AMBO), up 6.3%.

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. AthenaHealth has a market cap of $3.46 billion and is part of the services sector. The company has a P/E ratio of 188.4, below the average diversified services industry P/E ratio of 200 and above the S&P 500 P/E ratio of 17.7. Shares are up 80.3% year to date as of the close of trading on Thursday. Currently there are seven analysts that rate AthenaHealth a buy, three analysts rate it a sell, and nine rate it a hold.

TheStreet Ratings rates AthenaHealth as a hold. 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.

On the negative front, American Learning ( ALRN), down 13.6%, Cambium Learning Group ( ABCD), down 8.8%, Lime Energy ( LIME), down 8%, and Willdan Group ( WLDN), down 7.3%, were all laggards within the diversified services industry with Apollo Group ( APOL) being today's diversified services industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).
null

If you liked this article you might like

Athenahealth Stock Climbs Amid Strategic Review, Management Shakeup

Shares of Activist Target AthenaHealth Soar After Second Quarter Results

5 Things You Must Know Before the Market Opens Thursday

Mixed Signals Perplex Markets: Cramer's 'Mad Money' Recap (Friday 6/23/17)