The 10-second takeaway
For the quarter ended June 30 (Q2), athenahealth met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share dropped significantly.
Margins dropped across the board.
athenahealth tallied revenue of $103.5 million. The 19 analysts polled by S&P Capital IQ looked for revenue of $103.8 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $77.9 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 $0.24. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.23 per share. GAAP EPS of $0.11 for Q2 were 21% lower than the prior-year quarter's $0.14 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 60.4%, 230 basis points worse than the prior-year quarter. Operating margin was 6.5%, 560 basis points worse than the prior-year quarter. Net margin was 4.0%, 270 basis points worse than the prior-year quarter.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 188 members out of 239 rating the stock outperform, and 51 members rating it underperform. Among 62 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 47 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 $65.00.
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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 Athena Health. 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.