The Motley Fool: Does Athenahealth Inc's Growth Justify the Price?

Quality growth rarely comes cheap, but Wall Street seems to have taken it a little too far in the case of Athenahealth (NASDAQ: ATHN  ) . The ambulatory care market is still a growth opportunity, and the company is only just beginning to develop products that can seriously address the acute care market. Even so, it will take truly remarkable growth and share gains for Athenahealth to grow into its current valuation.

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Does Athenahealth Inc's Growth Justify the Price?

Seeking Alpha: Athenahealth Can't Maintain Its Sky-High Valuation

The market is full of misunderstood companies, as well as perhaps three times that number of companies where management believes Wall Street just doesn't understand the business or the proper value for it. With health IT provider athenahealth (ATHN) being one of the relatively rare companies where a majority of analysts are not positive on the stock and where the current price is above the average price target, it seems like there's some disconnect in this name.

While the top-line growth at athenahealth is indeed impressive, and the growth runway would seem to be long and wide indeed, this is not a stock where investors can afford to be complacent. The stock's valuation already assumes that the company emerges as a major player in healthcare IT, but investors may want to ask whether the company's progress with enterprise-scale customers and sales leverage merits such a lofty expectation.

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Athenahealth Can't Maintain Its Sky-High Valuation