The 10-second takeaway
For the quarter ended March 31 (Q1), athenahealth beat expectations on revenues and missed estimates on earnings per share.
Compared with the prior-year quarter, revenue expanded significantly and GAAP earnings per share contracted.
Margins dropped across the board.
athenahealth booked revenue of $96.6 million. The 18 analysts polled by S&P Capital IQ looked for revenue of $93.7 million on the same basis. GAAP reported sales were 38% higher than the prior-year quarter's $69.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.07. The two earnings estimates compiled by S&P Capital IQ averaged $0.16 per share. GAAP EPS of $0.07 for Q1 were 22% lower than the prior-year quarter's $0.09 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 59.8%, 120 basis points worse than the prior-year quarter. Operating margin was 5.4%, 250 basis points worse than the prior-year quarter. Net margin was 2.5%, 210 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $103.6 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $425.6 million. The average EPS estimate is $0.96.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 182 members out of 230 rating the stock outperform, and 48 members rating it underperform. Among 60 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give athenahealth a green thumbs-up, and 15 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 $60.40.
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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. He is the 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 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.