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 revenue-cycle-management specialist Accretive Health
So what: Accretive's headline non-GAAP earnings per share came in at $0.06 per share, right in line with Wall Street's expectations. Though the positive profit reversed a loss from last year, the prior loss owed to preferred share dividends. Year over year, the company's operating profit fell 36%, partly because of softer-than-expected revenue -- which management chalked up to timing of signing contracts -- and higher costs associated with its Quality and Total Cost of Care program.
Now what: Management's outlook likely had a lot to do with the stock's sell-off today. Revenue in the upcoming quarter could fall short of the bar that analysts had set. In addition, investors may be a bit skittish because Accretive just hit the public markets earlier this year. And I tend to be a bit skeptical of companies that focus on adjusted non-GAAP numbers, particularly when -- as with Accretive -- the adjustments primarily focus on ignoring the cost of share-based compensation. Accretive has an interesting business, but investors will want to keep this stock on a short leash -- if they keep it at all.
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