KeyBanc Previews Athenahealth's Investor Summit

KeyBanc Capital’s Donald Hooker expects the Investor Summit hosted by athenahealth, Inc ATHN on December 15 to include discussions on two “promising” verticals, hospitals and population health management.

Hooker maintains a Sector Weight rating on the company.

Significant Event

The analyst believes the event holds special importance this year, “given the elevated legislative and regulatory uncertainty following the election of Donald Trump as U.S. President and the nomination of Tom Price as U.S. Secretary of Health and Human Services, as well as the pending impact of both the Medicare Access and CHIP Reauthorization Act and the 21st Century Cures Act.”

Deceleration Ahead

Hooker expects athenahealth to see a significant deceleration in revenue growth, from 18.9 percent in 2016 to 14.9 percent in 2017.

The analyst also noted that bookings had been soft so far in 2016, with only single-digit year-on-year growth estimated for Q3:16.

“With the recent relaxation of the Merit-Based Incentive Program, we view physicians as having much less immediate pressure to adopt HCIT,” Hooker explained.

The analyst expects demand for larger healthcare organizations to slow unit there is greater clarity regarding the direction of U.S. healthcare policy under the Trump administration.

Other Concerns

Hooker also expressed concern regarding the meaningful decline in the company’s its “net promoter score,” driven by the rollout of Streamlined, a new user experience.

Although majority of athenahealth’s clients are likely to be on Streamlined by now, the analyst pointed out that “management had understaffed the transition, resulting in weak client support. It appears that all client support issues have been resolved, and we look forward to net promoter scores to begin to improve again in 2017.”