Athenahealth (ATHN) Tough Quarter and Aggressive Guidance - Jefferies

Jefferies analyst, Sean Dodge, reiterated his Underperform rating on shares of Athenahealth (NASDAQ: ATHN). 2Q was a pretty tough quarter all around—doc adds and revenue missed considerably, no new enterprise deals were announced, and non-GAAP EBIT margin was down both QoQ and YoY. GM improved sequentially but also fell shy of consensus. On the bright side, 80 hospitals are now under contract (up from 50 at 4Q15), and management not only reaffirmed '16 guidance but also expects to be at or above the mid-points. That said, the 2H ramp to get there is really steep.

Despite 2Q results falling well shy of consensus, management not only reaffirmed 2016 guidance but also now expects to be at or above the mid-points of its previous ranges. The analyst stated: "It is true 2Hs tend to be strongest for ATHN with higher utilization and flu seasons, but the required execution to even hit the mid-points this year will have to be nearly flawless."

No change to the price target of $105.

For an analyst ratings summary and ratings history on athenahealth click here. For more ratings news on athenahealth click here.

Shares of athenahealth closed at $137.20 yesterday.

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