Morgan Keegan Gives Color On Athenahealth Following Earnings Results, Raises PT

Athenahealth ATHN reported December results of $0.28 on $69.4 million versus the consensus of $0.20 on $67.6 million. Strong collections and higher Clinicals/Communicator penetration overcame a 3-4% reduction in average physician volumes. Higher levels of automation combined with some expense reversals to drive significant margin expansion. Morgan Keegan believes that ATHN has significant advantages due to the flexibility of its web-based technology and the cash flow improvement that physicians enjoy after adopting its platform. Although the margin expansion this quarter partially benefitted from some one-time items, it also demonstrated that ATHN has the ability to be dramatically more profitable. Morgan Keegan has a $49 PT and Outperform rating on ATHN ATHN is trading lower at $46.09