Here's What Barclays Thinks About Athenahealth After Its Investor Day

Analyst Eric Percher stated that athenahealth presented “an ambitious vision for further penetrating the ambulatory market and swiftly extending the company's reach not just to the sub-50 bed community hospital market but also to larger institutions.”

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Although the company does have a technology advantage, Percher disagrees regarding the number of ambulatory enterprise prospects available to the company, while expecting limited contributions from CAH hospitals during 2016 and 2017.

Percher also believes that there could be “exponential difficulty of moving upstream from <50 bed hospitals to 51-250 bed hospitals.”

“We are encouraged by athena's additions and the pace at which the Razor base will convert to athenaOne but caution that investors should not overestimate CAH contributions as such hospitals typically have top-line of only $15-$35 million,” according to the Barclays report.

Percher also cautioned that success in the CAH market did not guarantee success in the 50+ bed hospital market.

On the other hand, the initial revenue guidance for 2016 came in below the conservative estimates. Management attributed the expectations of lower growth rate to weak enterprise bookings in 2014 and customer consolidation.

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