UPDATE: Sterne Agee Downgrades Greenway Medical Technologies to Underperform on Multiple Compression

Sterne Agee reduced its rating on Greenway Medical Technologies GWAY from Neutral to Underperform and lowered its price target from $15 to $14. Sterne Agee said, "Consensus CY13 EBITDA estimate has dropped 8% while the EV/EBITDA multiple increased by ~4 points (17%) over the past month (Exhibit 2). GWAY has the second highest EV/EBITDA multiple among peers. Without a meaningful upward revision to EBITDA guidance, we do not believe this multiple trajectory is sustainable. The company currently forecasts adjusted EBITDA of $19.3-23.4 million for FY13. Our estimate is at the midpoint of the range." Greenway Medical Technologies closed at $17.75 on Friday.