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

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 lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day up 0.4%. By the end of trading, AthenaHealth fell $1.08 (-1.2%) to $90.92 on light volume. Throughout the day, 212,637 shares of AthenaHealth exchanged hands as compared to its average daily volume of 468,500 shares. The stock ranged in price between $90.50-$92.64 after having opened the day at $91.86 as compared to the previous trading day's close of $92. Other companies within the Diversified Services industry that declined today were: K12 ( LRN), down 13.4%, China HGS Real Estate ( HGSH), down 13.1%, WidePoint Corporation ( WYY), down 12.6%, and Innotrac Corporation ( INOC), down 9.2%.

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 $3.29 billion and is part of the services sector. The company has a P/E ratio of 194.6, above the average diversified services industry P/E ratio of 190.5 and above the S&P 500 P/E ratio of 17.7. Shares are up 86.2% year to date as of the close of trading on Monday. Currently there are six analysts that rate AthenaHealth a buy, two analysts rate it a sell, and 11 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 positive front, Amrep Corporation ( AXR), up 18.9%, Willdan Group ( WLDN), up 14.4%, Fortune Industries ( FFI), up 13.6%, and UniTek Global Services ( UNTK), up 13%, were all gainers within the diversified services industry with MasterCard Incorporated ( MA) being today's featured diversified services industry leader.

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).

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