Jefferies: Highlighting Athenahealth's Big Deal (Maybe)

In a report published Tuesday, Jefferies analysts maintained a Hold rating on

, with a price target of $145, saying that there are scanty details of the deal announced by the company. Capitalizing on the HIMSS excitement, the company has announced an athenaOne enterprise deal with Trinity Health, one of the largest health systems in the US. athenahealth has indicated that it would be deploying athenaOne into "more than one" of Trinity's regional health ministries, commencing "as early as" July this year. Management has refrained, however, from indicating the number of docs that will be added, but suggesting that "the number would be significant." In the report Jefferies noted, "We believe the terms "states, markets, and regional ministries" are synonymous, meaning ATHN winning the mandate in "more than one" ministry is a far cry from signing the entire system. Unlike Ascension, Trinity's physicians are not united under a singular organizational umbrella. ATHN must win over Trinity ministries on a market-by-market basis." "With Trinity not implementing until July at the earliest (and only including a fraction of the 3,300 employed docs), the only 400-500 Ascension docs remaining could cause Enterprise doc adds to drop 40%+ in 2015. HPP appears unlikely to advance this year. Adds through the small/group channel did pick up some steam in 4Q14 (after a flattish 3Q), but would have to be up nearly 50% in 2015 for the total Collector doc count to grow 20% this year," the analysts commented. The company is in the process of integrating its recent acquisitions of RazorInsights and WebOMR. Both these entities help athenahealth's foray into the inpatient market.