athenahealth (NASDAQ: ATHN) and Tabula Rasa Healthcare (NASDAQ:TRHC) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Institutional & Insider Ownership

25.3% of Tabula Rasa Healthcare shares are owned by institutional investors. 3.2% of athenahealth shares are owned by company insiders. Comparatively, 45.8% of Tabula Rasa Healthcare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares athenahealth and Tabula Rasa Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
athenahealth 2.80% 6.91% 3.80%
Tabula Rasa Healthcare -10.27% -9.58% -4.51%

Analyst Ratings

This is a breakdown of current recommendations and price targets for athenahealth and Tabula Rasa Healthcare, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
athenahealth 2 10 12 0 2.42
Tabula Rasa Healthcare 0 0 5 0 3.00

athenahealth currently has a consensus target price of $147.38, indicating a potential upside of 5.93%. Tabula Rasa Healthcare has a consensus target price of $18.75, indicating a potential downside of 6.20%. Given athenahealth’s higher possible upside, equities research analysts clearly believe athenahealth is more favorable than Tabula Rasa Healthcare.

Valuation and Earnings

This table compares athenahealth and Tabula Rasa Healthcare’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
athenahealth $1.15 billion 4.83 $127.70 million $0.80 173.91
Tabula Rasa Healthcare $108.83 million 3.18 $2.26 million ($0.74) -27.01

athenahealth has higher revenue and earnings than Tabula Rasa Healthcare. Tabula Rasa Healthcare is trading at a lower price-to-earnings ratio than athenahealth, indicating that it is currently the more affordable of the two stocks.

Summary

athenahealth beats Tabula Rasa Healthcare on 9 of the 12 factors compared between the two stocks.

athenahealth Company Profile

athenahealth, Inc. provides network-based medical record, revenue cycle, patient engagement, care coordination and population health services. The Company also offers Epocrates and other point-of-care mobile applications. The Company delivers majority of its service offerings through a single instance of cloud-based software, athenaNet. The Company has a range of network-enabled services to support healthcare providers across the continuum of care. The Company offers various combinations of its services to its clients, including athenaOne and athenaOne for Hospitals and Health Systems, depending on whether they are medical groups and practices or hospitals and larger health systems. As of December 31, 2016, the Company connected care across a national network of approximately 88,000 providers and approximately 86 million patients. Its suite of network-enabled services includes athenaCollector, athenaClinicals, athenaCommunicator, athenaCoordinator, Population Health and Epocrates.

Tabula Rasa Healthcare Company Profile

Tabula Rasa HealthCare, Inc. (Tabula Rasa), formerly CareKinesis, Inc., is a provider of patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations and manage risk. The Company delivers its solutions through a suite of technology-enabled products and services for medication risk management, which includes bundled prescription fulfillment and adherence packaging services for client populations with complex prescription needs. It also provides risk adjustment services, which help its clients to properly characterize a patient’s acuity, or severity of health condition, and optimize the associated payments for care. The Company serves approximately 100 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. Its products and services are built around the Medication Risk Mitigation Matrix, or MRM Matrix.

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