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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
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.
Driving athenahealth’s revenueFirst, 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.
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.
athenaCollector
•Medical billing and practice management.•#1 practice provider in 2013 by KLAS.•Cloud based solution.•8% improvement in collections.
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.
Driving athenahealth’s revenue
• ~53,000 providers served.• $12 billion in client collections annually.• ACA meaningful use bonuses for IT goals.
Driving athenahealth’s revenue• Significant annualized growth since 2006, including 30% YoY
growth in the first quarter.
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.
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?
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.