When a company with a market cap over $6 billion operates in one of the most mature and complicated industries beats on earnings per share, investors should take notice; when a company beats the market consensus by 300%, investors should move.
Athenahealth, Inc (NASDAQ:ATH) went into their Thursday night conference call with loud murmurs of a pending beat, but even the optimistic investor was shocked when they reported an earnings per shares of $0.28. The consensus was $0.07. The market response for this great news was an 8.44% stock increase just in the next day alone. Though, do they have any upside left in them?
In short, yes. Athenahealth’s financial statements alone paint a great upside. Assets are up 4.6% over the last 6 months. Liabilities decreased by the 5.2% over the same period, and equity increased by 13.2%. The best sign coming from the balance sheet is the shocking growth in retained earnings, from $43.5 million to $100.2 million, a 130.3% increase in just 6 months, couple that with debt declining 3.4%, and Athenahealth greatly improved their major fiscal health indicators. Their gross profit climbed 21.9%, from 6 months ago; along with net income moving from the red to the black with an $11.8 million swing, they continue to add to their case for a buy.
