by
Thomas Dworetzky, Contributing Reporter | May 23, 2017
The company's cloud-based software may have great potential, but its stock prices have languished for several years, which in turn has made it an attractive target to an investor such as Elliott. Its shares were down almost 20 percent after Q1 earnings missed both EPS and revenue estimates in April – and its annual guidance also dropped. It is down 48 percent from its high in 2014.
After the Elliott move was announced, the stock soared from a May 17 close of 106.28 to May 18 close of 130.07; close to a 22 percent uptick.
Wall Streeters responded to the dramatic move on May 19. "Fundamentals remain a concern but the involvement of an activist limits [near term] downside and increases the chances of a sale," wrote Jefferies' Sean Dodge,
according to TheStreet.com.
"We believe the fund may push for a cost reduction program, given ATHN's revenue slowdown and high operating costs," noted David Larsen of Leerink Partners LLC in a note Thursday, May 18, the stock site reported.
But he warned that Athenahealth “is now a mature business in a slowing industry. The vast majority of physicians and hospitals in the U.S. have attested to Meaningful Use, and ATHN is facing much stiffer competition" from firms like Cerner and Epic Systems.
In October, 2013, when the EHR market was relatively “young”, Athenahealth's Bush had one of his very “outspoken” interviews with HCB News. So how do his comments then appear from the vantage point of today's state-of-health-care data?
When asked about then traditional EHR systems, he said, “My main criticism would be the same as we hear from caregivers. EHRs are slow, stupid and siloed. Rather than live up to the promise of delivering better care more efficiently, too many EHRs slow down physicians when being hobbled and distracted is the last thing they need. And all the shiny bells and whistles are too often sugar frosting on a turd. The underlying tool is not well designed, and perpetually unable to make the simplest connections that allow health information to be accessed and applied where it's needed next.”
When asked what were the main obstacles EHRs presented to providers, he advised that, “crappy software has led to problems, not solutions, and given a promising technology a bad name. Why would anyone want to spend thousands and thousands of dollars knowing in the back of their mind there's a voice whispering 'you may have bought the wrong one'? The 'solution', in whatever manner it's delivered, should allow the physician to be a physician and not someone pressed into a data entry role or forced to fuss around with Meaningful Use when all he or she really wants to do is help people get better.”
