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What You Need To Know Ahead of Athenahealth's Earnings


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Rapidly changing regulation and surging patient care demand tied to reform is creating significant demand for next generation technology solutions from healthcare providers. Athenahealth (NASDAQ: ATHN) has been one of the biggest beneficiaries of this trend; however, earnings per share have typically fallen short of analyst projections, creating hurdles for share prices.In the following slideshow, I offer a refresher on athenahealth's products, challenges, and opportunities that will help you better understand the company when it reports earnings on July 18th.

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What You Need To Know Ahead of Athenahealth's Earnings

  1. 1. What You Need To Know Ahead of Athenahealth’s Earnings
  2. 2. Athenahealth • Driving athenahealth’s success: • Ongoing migration of patient records online. • Increased communication with patients online. • Streamlining practice scheduling and billing. • Future growth opportunity: • Significant dissatisfaction among practices. • Ongoing regulatory driven demand. • Switch to ICD-10 (ICD-10 ready since February). • Provider incentives for coordinated care. • Meaningful use bonuses.
  3. 3. Driving athenahealth’s revenue First, let’s consider athena’s revenue sources. Athenahealth products: 1. Electronic health records. • athenaClinicals. 2. Practice management. • athenaCollector. 3. Patient communication. • athenaCommunicator. 4. Order transmission. • athenaCoordinator.
  4. 4. athenaClinicals •15 million patients clinical records. •#2 EHR solution for 2013 by KLAS. •1-75 physicians •Cloud based solution. •95% Meaningful use attestation in 2013.
  5. 5. athenaCollector •Medical billing and practice management. •#1 practice provider in 2013 by KLAS. •Cloud based solution. •8% improvement in collections.
  6. 6. athenaCommunicator & athenaCoordinator athenaCommunicator •Improves patient engagement. •Reduces cancellations. •8% decline in no-shows. athenaCoordinator •Connects labs, imaging, etc with providers for more efficient ordering and fulfillment.
  7. 7. Driving athenahealth’s revenue • ~53,000 providers served. • $12 billion in client collections annually. • ACA meaningful use bonuses for IT goals.
  8. 8. Driving athenahealth’s revenue • Significant annualized growth since 2006, including 30% YoY growth in the first quarter.
  9. 9. Earnings outlook •Despite robust growth, analysts continue to over-model earnings and under- model investments in R&D and SG&A. •Analysts have been lowering their expectations, which could provide athenahealth with an opportunity to finally begin over-delivering relative to analyst forecasts.
  10. 10. Fool-worthy thoughts •~70% of 952 respondents describe their EHR investment as not worth the effort, resources, and costs. Substantial switching risk and opportunity. •$36 billion addressable market and growing. •High gross margin business (~63%). •Significant spending on products and marketing. •Analyst’s historically over-estimate EPS. Will that trend shift given falling expectations?
  11. 11. Six stock picks poised for incredible growthSix stock picks poised for incredible growthSix stock picks poised for incredible growth Leaked: This coming blockbuster will make even athenahealth jealous.