Athenahealth Catching Up On Competitors’ Market Share

A recent report by MarketResearch.com estimates the U.S. electronic medical records (EMR) market to grow 18% annually to $6.05 billion in 2015. The market was estimated to be worth $2.18 billion in 2009. The report claims that growth in the market is being fueled by the nationwide healthcare reforms and the need to control healthcare costs while improving the quality of services offered.

Athenahealth’s Financials
Athenahealth’s (NASDAQ:ATHN) Q2 revenues grew 33% over the year to $77.9 million, compared with the market’s estimate of $75 million. By segment, Business Services revenues grew 34% to $75.3 million, while Implementation and Other revenues grew 17.8% to $2.5 million. EPS of $0.22 was also ahead of the Street’s projected EPS of $0.18.

Athenahealth is projecting the year’s revenues to be in the range of $315 million to $325 million compared with their earlier projections of $300 million to $315 million. Projected EPS was also revised up to $0.70-$0.83. Analysts were expecting revenues of $312.2 million with EPS of $0.81 for the year.

Athenahealth’s EMR Services
There are over a thousand providers of EMR services in the U.S. Within the physician office EMR market, Allscripts was the leader in 2010 with a 15.7% market share, while Meditech commanded the leadership role last year in the hospital EMR market with a 24.9% share. Athenahealth has been building their portfolio to catch up with these players. The alliance reported last quarter with Microsoft is helping them win bigger contracts. They recently announced University Hospitals Case Medical Center in Cleveland as their most recent client within the segment.

Additionally, they announced plans to acquire Proxsys, a Birmingham, Alabama–based provider of cloud-based health care related services, for $28 million. Proxsys’s offerings are focused on the front end of the revenue cycle for hospital systems. They provide technology solutions for care coordination services, order transmission, referral management, hospital patient registration, and insurance pre-certification to 90 clients representing 8,000 physicians and 60,000 patient registrations each month. Through the acquisition, Athena will be able to offer more valuable services to hospital systems and ambulatory medical groups and help grow their own emerging care coordination services under the athenaCoordinator brand.

Athena’s stock is trading at $60.00 with a market capitalization of $2.1 billion. It touched a new 52-week high of $61.78 on August 2.