Switch to:
GuruFocus has detected 3 Warning Signs with athenahealth Inc $ATHN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
athenahealth Inc (NAS:ATHN)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

athenahealth Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

ATHN' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 7

4
8

During the past 13 years, the highest Piotroski F-Score of athenahealth Inc was 8. The lowest was 4. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was -0.833 + -1.915 + 13.941 + 9.807 = $21 Mil.
Cash Flow from Operations was 8.305 + 73.69 + 53.978 + 46.627 = $183 Mil.
Revenue was 256.149 + 261.939 + 276.671 + 288.141 = $1,083 Mil.
Gross Profit was 150.76 + 158.048 + 173.433 + 67.159 = $549 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(1118.7 + 1085.312 + 1119.765 + 1154.688 + 1189.2) / 5 = $1133.533 Mil.
Total Assets at the begining of this year (Dec15) was $1,119 Mil.
Long-Term Debt was $273 Mil.
Total Current Assets was $343 Mil.
Total Current Liabilities was $198 Mil.
Net Income was -8.832 + 9.349 + 5.795 + 7.688 = $14 Mil.

Revenue was 206.434 + 224.694 + 236.068 + 257.504 = $925 Mil.
Gross Profit was 121.877 + 134.795 + 141.218 + 64.61 = $463 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(930.62 + 968.947 + 1052.202 + 1091.402 + 1118.7) / 5 = $1032.3742 Mil.
Total Assets at the begining of last year (Dec14) was $931 Mil.
Long-Term Debt was $287 Mil.
Total Current Assets was $320 Mil.
Total Current Liabilities was $194 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

athenahealth Inc's current net income (TTM) was 21. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

athenahealth Inc's current cash flow from operations (TTM) was 183. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

athenahealth Inc's return on assets of this year was 0.01877179. athenahealth Inc's return on assets of last year was 0.01504373. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

athenahealth Inc's current net income (TTM) was 21. athenahealth Inc's current cash flow from operations (TTM) was 183. ==> 183 > 21 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=272.8/1133.533
=0.24066348

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=287.4/1032.3742
=0.27838743

athenahealth Inc's gearing of this year was 0.24066348. athenahealth Inc's gearing of last year was 0.27838743. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Dec16)=Total Current Assets/Total Current Liabilities
=343.2/197.9
=1.7342092

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=320.3/193.7
=1.65358802

athenahealth Inc's current ratio of this year was 1.7342092. athenahealth Inc's current ratio of last year was 1.65358802. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

athenahealth Inc's number of shares in issue this year was 40.1. athenahealth Inc's number of shares in issue last year was 39.6. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=549.4/1082.9
=0.5073414

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=462.5/924.7
=0.50016221

athenahealth Inc's gross margin of this year was 0.5073414. athenahealth Inc's gross margin of last year was 0.50016221. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Dec15)
=1082.9/1118.7
=0.96799857

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=924.7/930.62
=0.99363865

athenahealth Inc's asset turnover of this year was 0.96799857. athenahealth Inc's asset turnover of last year was 0.99363865. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+1+0+1+0
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

athenahealth Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

athenahealth Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 0111111011
Question 2 1111111111
Question 3 1101100011
Question 4 1011111111
Question 5 1011110101
Question 6 1001010111
Question 7 0000000100
Question 8 0111100001
Question 9 1001101010
F-score 6458754567

athenahealth Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1001111111
Question 2 1111111111
Question 3 1011111111
Question 4 1111111111
Question 5 1100001111
Question 6 1111111101
Question 7 1100000100
Question 8 1000000001
Question 9 0001111000
F-score 8546667757
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK