The 10-second takeaway
For the quarter ended Dec. 31 (Q4), athenahealth met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
athenahealth recorded revenue of $92.5 million. The 20 analysts polled by S&P Capital IQ predicted revenue of $92.5 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $69.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.24. The six earnings estimates compiled by S&P Capital IQ predicted $0.23 per share on the same basis. GAAP EPS of $0.15 for Q4 were 29% lower than the prior-year quarter's $0.21 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 62.4%, 240 basis points worse than the prior-year quarter. Operating margin was 10.1%, 800 basis points worse than the prior-year quarter. Net margin was 5.8%, 470 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $93.5 million. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $425.5 million. The average EPS estimate is $0.98.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 177 members out of 224 rating the stock outperform, and 47 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give athenahealth a green thumbs-up, and 18 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on athenahealth is hold, with an average price target of $54.53.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of athenahealth. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.