Will ATHN Have Another Earnings Sell Off?

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Two out of the last three earnings reports from athenahealth [$ATHN] have sparked notable drops in the company's stock.  The provider of cloud-based data services for health care companies is now coming up on its latest earnings announcement, which is due out later this week.

Ahead of the announcement, Implied Volatility has been rising steadily and is now sitting at a multi-month high.  The news comes as the company has gotten into a public feud with fellow health care date firm Epic Systems.

athenahealth is scheduled to report earnings on October 20, and they will hold a conference call to discuss results on the morning of Friday October 21 at 8:00 AM ET.  athenahealth is expected to report earnings of $0.47 per share, compared to $0.36 per share in the same period last year. Revenue is projected to rise by 19% to nearly $281 million.

Implied Volatility has been rising steadily in the last several weeks.  The figure has moved from a closing level of 25.4 on August 19 to a close of 57.1 on October 14.  This marked its highest level since February.

The last time athenahealth reported earnings, a disappointing result sparked a sharp decline in the company's stock.  After the closing bell on July 21, the company reported earnings of $0.34 per share, up from $0.32 per share in previous year.  However, the result came in below the $0.42 per share the market was expecting.

Following the earnings announcement, shares of athenahealth dropped $12.28 the following day, closing at $124.92.  This represented a drop of about 9%.

The stock continued to drift lower in the weeks after the earnings release.  Shares reached a near-term closing low of $118.19 on September 14.  This marked its lowest level since February.

The slide in February, which took the stock to a multi-month low, also followed a disappointing earnings announcement.

The ATM Straddle premium for ATHN's October 21 expiration is $11.55, or 9.4 percent.  For October 28, it is $12.15, or 9.8%.

Lately, athenahealth has gotten into a verbal dispute with health data exchange company Epic Systems.  Earlier this month, athenahealth CEO Jonathan Bush gave an interview in which he made remarks that Epic took exception to.  Epic responded with a "Fact Check" statement that refuted specific points that Bush has made.

Bush had suggested that Epic was holding back the exchange of health data, a charge that Epic denies.

For more information, visit ATHN's Earnings History page on MarketChameleon.com

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