Evolent Health (NYSE: EVH) and athenahealth (NASDAQ:ATHN) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Institutional & Insider Ownership

82.5% of Evolent Health shares are owned by institutional investors. 8.8% of Evolent Health shares are owned by insiders. Comparatively, 3.2% of athenahealth shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Evolent Health and athenahealth, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Evolent Health 0 0 12 1 3.08
athenahealth 2 11 11 0 2.38

Evolent Health currently has a consensus price target of $28.73, indicating a potential upside of 54.45%. athenahealth has a consensus price target of $148.77, indicating a potential upside of 23.34%. Given Evolent Health’s stronger consensus rating and higher probable upside, research analysts plainly believe Evolent Health is more favorable than athenahealth.

Earnings & Valuation

This table compares Evolent Health and athenahealth’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Evolent Health $361.53 million 3.84 -$51.15 million ($1.21) -15.37
athenahealth $1.15 billion 4.19 $127.70 million $0.80 150.78

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

Profitability

This table compares Evolent Health and athenahealth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Evolent Health -17.57% -6.44% -5.13%
athenahealth 2.80% 6.91% 3.80%

Risk & Volatility

Evolent Health has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, athenahealth has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.

Summary

athenahealth beats Evolent Health on 8 of the 14 factors compared between the two stocks.

About Evolent Health

Evolent Health, Inc. is engaged in healthcare delivery and payment. The Company supports health systems and physician organizations in their migration toward value-based care and population health management. The Company provides an end-to-end, technology-enabled services platform for providers. The Company’s platform, powered by its technology, processes and integrated services, enables providers to migrate their economic orientation from fee-for-service (FFS) reimbursement to payment models that reward value-based payment models. The Company’s services include providing its customers, with a population management platform, integrated data and analytics capabilities, pharmacy benefit management (PBM) services and comprehensive health plan administration services. Its value-based operations are empowered and supported by Identifi. Identifi is the Company’s technology platform that aggregates and analyzes data, manages care workflows and engages patients.

About athenahealth

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.

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