Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Greenway Medical Technologies' Shares Slumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of health care software provider Greenway Medical Technologies (NYSE: GWAY  ) fell as much as 12% earlier in the trading session following the release of its fourth-quarter earnings results last night.

So what: For the quarter, Greenway continued to demonstrate moderate growth trends as the health care sector transitions to a software-based records platform. Revenue jumped 24% year over year to $36.4 million with net income of $0.07. Although there are few analysts covering the company, sales surpassed estimates by a clean $2 million, but profits were $0.02 shy of expectations. Furthermore, the company's fiscal 2013 forecast of $149 million-$156 million and EPS of $0.27-$0.31 failed to impress. The sales figures are smack dab in the middle of Wall Street's expectations, but analysts had been looking for EPS of $0.33.

Now what: Greenway, and much of the health-care sector, is really just in its infancy in terms of utilizing and optimizing software with regards to record keeping and data storage. The company likely has a bright future, and just last week signed a health records deal with Walgreen (NYSE: WAG  ) , but at more than 50 times forward earnings (based on the midpoint of Greenway's fiscal 2013 guidance), I have no desire to be anywhere near the stock until its earnings power more accurately represents its valuation.

Craving more input? Start by adding Greenway Medical Technologies to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2002254, ~/Articles/ArticleHandler.aspx, 10/24/2016 12:40:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,222.28 76.57 0.42%
S&P 500 2,148.71 7.55 0.35%
NASD 5,300.64 43.23 0.82%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
GWAY.DL $0.00 Down +0.00 +0.00%
WBA $83.10 Up +1.53 +1.88%
Walgreens Boots Al… CAPS Rating: ****