Why Athenahealth Popped
Jul 20th 2012 4:40PM
Updated Jul 20th 2012 4:42PM
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 Athenahealth (NAS: ATHN) popped by as much as 12% after the company reported a solid second quarter earnings release.
So what: Revenue grew by a third, to $103.5 million, turning into an adjusted profit of $0.24 per share once it reached the bottom line. The figures were mostly in line with analyst expectations, but obviously were enough to send investors cheering.
Now what: CEO Jonathan Bush said the results confirm the company's approach to cloud-based services in healthcare, doing its part to try and help bring medical costs down and improve the healthcare experience. The Street's not entirely convinced, as UBS is bearish on Athenahealth with a "sell" rating and $58 price target. The brokerage agrees that the results were solid, but doesn't agree with the company's current valuation multiples.
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The article Why Athenahealth Popped originally appeared on Fool.com.Fool contributor Evan Niuholds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Athena Health. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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