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

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 Greenway Medical Technologies (UNKNOWN: GWAY.DL  ) , a cloud-based health-care management services company, dipped as much as 17% after the company revised its full-year 2013 outlook.

So what: Before the opening bell, Greenway offered an update for its remaining fiscal 2013 based on preliminary results for the third quarter. Greenway now expects full-year revenue of $132 million to $134 million, and a GAAP EPS loss of $0.11 to $0.13 on gross margin ranging from 51.5% to 52.2%. At the end of the second quarter in mid-February, it had been forecasting revenue of $145 million to $150 million, and a GAAP EPS profit of $0.10 to $0.17 on gross margin of 54.5% to 56%. Greenway's CEO, Tee Green, noted that a shift away from one-time licensing models to a recurring revenue stream is what hurt Greenway's revenue outlook. He also noted that recurring revenue is up to 56% of total revenue in the current quarter, as opposed to just 46% in the year-ago period.

Now what: It's pretty easy based on the above figures to see why the Street isn't one bit happy with Greenway today. As a provider of electronic health records and other cloud-based health-management tools, I don't see any reason why it should be struggling to recruit new customers and/or boosting its recurring revenue stream. I applauded Greenway for landing a whale in Walgreen last summer, and I feel it could offer a very compelling investment thesis on paper moving forward; unfortunately it has failed to deliver for investors now on multiple occasions.

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.

While you can certainly make huge gains in health-care-based software companies, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

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

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: 2394412, ~/Articles/ArticleHandler.aspx, 9/27/2016 6:54:27 AM

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 9 hours ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

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%