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Morgan Stanley Reports on Athenahealth

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Morgan Stanley commented on Athenahealth (NASDAQ: ATHN) in a report released today. In the report, Morgan Stanley was cautious in its assessment of the stock.

Morgan Stanley writes, "Management characterized Anodyne as “a year behind” schedule due to the health issues of its CEO, but indicated confidence with regards to the potential of Anodyne as “a sales lead generator” by identifying physician practices that are under-performing with respect to revenue cycle efficiencies. Management bullish on ATHN's long-term gross margin runway, despite the conservative CY11 guidance given in December, the high-end of which points to only 75 basis points of YOY expansion. Management indicated that there is potential for a ~70% non-GAAP gross margin in the long term (versus ~63% now) through the scaling of its physician network and automating manual processes. This could represent upside to our 2015E gross margin estimate of~65%."

Morgan Stanley currently has an Underweight rating on Athenahealth. Shares of Athenahealth closed at $45.31 yesterday, down $0.06 from the opening bell.

 

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