To be clear, Athenahealth (ATHN) is a battleground stock. The $3.7 billion healthcare service provider has been beaten down the past 6 months (-27% based on yesterday's close) as investors feared growing pains related to C-Suite level employee turnover and bad quarterly bookings growth (i.e. contracts with its customers).
Investor sentiment was so dismal that Hedgeye Healthcare analyst Andrew Freedman hosted a special conference call with institutional investors Tuesday, ahead of the company’s Investor Day.
“I think if you see even marginal improvement, you can get a stock of $120 to $130 in pretty short order,” Freedman explains in the video excerpt above.
Good call.
Athenahealth is up more than +20% today. That’s right +20%. After the close last night, Athenahealth announced strong 2017 guidance and added an actual number for bookings guidance that should bolster its standing among sell-side analysts.
Where do we go from here?
Freedman offered this update in a note to institutional subscribers earlier this morning:
“We see continued upside into the $160s as ambulatory stabilizes, inpatient accelerates and sell side estimates have bottomed. We laid out the potential for +30% upside in our presentation on Monday, December 12th that walked through our latest thoughts and analysis. Overall, while the bull case is far from bullet-proof, we continue to view the risk-reward and catalyst calendar as favorable heading into 2017.”
That implies 40% upside even after today’s pop.
