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What's in Store for athenahealth (ATHN) in Q2 Earnings?

athenahealth Inc. ATHN is set to report second-quarter 2017 results on Jul 20. Last quarter, the company posted earnings of 10 cents per share, which missed the Zacks Consensus Estimate of 11 cents.

On an average, athenahealth beat the Zacks Consensus Estimate by almost 12.66% over the last four quarters.

Let’s take a look at how things are shaping up for the company prior to this announcement.

Factors at Play

We believe a strong product portfolio and expanding physician base will continue to drive athenahealth’s top line. Applications like athenaClinicals, athenaClinicals-Streamlined, athenaInsight, athenaCommunicator, athenaOne and athenaCollector for Hospital and Health Systems are fortifying its market position.

However, on the flip side, lack of enterprise-sized deals, winding up of government funded stimulus and increasing competition in the Healthcare IT market are major dampeners. For fiscal 2017, the company expects revenues in the band of $1,210–$1,250 million. Adjusted operating income is projected in the range of $120–$140 million. Annual bookings are expected at around $350–$400 million.

The question lingering in investors’ minds now is whether athenahealth will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is seven cents, reflecting a year-over-year increase of 16.7%. We note that the Zacks Consensus Estimate has been stable ahead of the earnings release. Analysts polled by Zacks expect revenues of $298.5 million, up 14.0% from the year-ago quarter.

athenahealth, Inc. Price, Consensus and EPS Surprise

 

athenahealth, Inc. Price, Consensus and EPS Surprise | athenahealth, Inc. Quote

Earnings Whispers 

Our proven model does not conclusively show that athenahealth is likely to beat on earnings in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: athenahealth’s Earnings ESP is 0.00% since both the Most Accurate estimate and the Zacks Consensus Estimate stand at 7 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: athenahealth has a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

Also, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter:  

Thermo Fisher Scientific Inc. TMO has an Earnings ESP of 0.44% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dextera Surgical Inc. DXTR has an Earnings ESP of +9.09% and carries a Zacks Rank #2.

Telefex Inc. TFX has an Earnings ESP of +1.06% and holds a Zacks Rank #2.

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athenahealth, Inc. (ATHN): Free Stock Analysis Report
 
Thermo Fisher Scientific Inc (TMO): Free Stock Analysis Report
 
Teleflex Incorporated (TFX): Free Stock Analysis Report
 
Dextera Surgical Inc. (DXTR): Free Stock Analysis Report
 
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