Leerink Swann Upgrades athenahealth (ATHN) to Outperform; Strong Growth Still Expected

Leerink Swann upgraded athenahealth (NASDAQ: ATHN) from Market Perform to Outperform with a price target range of $59-$60.

Leerink analyst says, "At yesterday's Investor Day conference management provided 2012 adjusted EPS guidance of $0.85-$0.97 which was well below our estimate and consensus of $1.15. While 2012 will be a year of higher investment spend, (1) revenue is still expected to grow 30% per year and nearly all of the revenue is recurring, (2) we believe the quality of the software and service is very high, and (3) we believe margins tied to Anodyne, Proxsys, Coordinator, and Clinicals will improve in late 2012 which implies better earnings growth in 2013."

"We are reducing our 2012E EPS by $0.15 to $1.00 and we lower our 2013E EPS by $0.40 to $1.25, in order to reflect increased investment spend, mostly via higher cost-of-service. While we believe 2012 will be a year of increased costs, we believe 2013 margins should improve."

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 $49.04 yesterday.

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