AthenaHealth sets two-year high on growth outlooks

AP News
Posted: Dec 04, 2009 2:07 PM

Shares of AthenaHealth Inc. rose to a two-year high Friday after the clinical software maker forecast continued profit and revenue growth over the next five years.

The company makes software to help physicians communicate with patients, schedule appointments, collect payments, organize records and reduce paperwork, among other functions.

In a presentation to analysts, AthenaHealth said it expects its annual profits to grow more than 40 percent per year into 2014, with revenue rising by at least 30 percent each year. When AthenaHealth went public in 2007, it said it expected revenue growth of more than 30 percent per year through 2011.

In morning trading, shares of the Watertown, Mass., company peaked at $47.75. That was their highest price since November 2007, about six weeks after AthenaHealth's IPO. Shares later returned some of those gains, and were up 44 cents to $46.14 in afternoon trading.

Citi Investment Research analyst Charles Boorady said AthenaHealth is reporting "compelling" growth and is taking market share away from rivals that are not as innovative. He also praised the company's management. However, he kept a "Sell" rating on the stock due to its price. He raised his price target to $34 per share from $32.

AthenaHealth shares last closed under $34 in July.

JMP Securities analyst Liisa Bayko kept a "Market Outperform" rating and raised her price target to $51 per share from $41. She described the company's comments as "extremely upbeat."

(This version CORRECTS the company's location to Watertown, Mass.)