Athenahealth’s (ATHN) shares have gained more than 20% today, which means that their results weren’t just good, but completely reset Wall Street’s expectations.
Agence France-Presse/Getty Images Which is exactly what Athenahealth did. The online billing and medical data company reported a profit of 57 cents a share, well above forecasts for 44 cents, thanks to better profit margins.
If that was all, Athenahealth’s shares would have gained a few percentage points. Instead its stock has surged 25% to $173.82 at 3:56 p.m. The reason: the “best is yet to come,” says Sterne Agee’s Greg Bolan. He explains:
In our view, [Athenahealth] possesses the strongest position to harvest opportunities arising from the invariable chaos created by ICD-10 [a revamp of the World Health Organization's disease codes. Ed.] in October. In a recent investor call with the AC Group…CEO Mark Anderson estimated that of the 1.1MM billable healthcare providers (active physicians and nurse practitioners) in the U.S., 20-25% will be transitioned to an outsourced billing service following the implementation of ICD-10 in October 2014. To put his point into perspective, we are modeling for 10,400 new physicians to go live on Collector in 2014. Mr. Anderson was quite vocal about the superiority of athenaCollector to ambulatory RCM services provided by eCW (private), Quality Systems (QSII), and CareCloud (private). We continue to believe Athena has the “mouse trap” technology for outsourced billing services to hospital-owned and independent practices.
Which might help explain why Quality Systems has dropped 0.1% to $17.98 today, even as Allscripts Healthcare Solutions (MDRX) has gained 1.7% to $16.15 and Cerner (CERN) has risen 3.4% to $55.42.
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