Head to Head Comparison: Castlight Health, inc. (CSLT) versus athenahealth (ATHN)

athenahealth (NASDAQ: ATHN) and Castlight Health, inc. (NYSE:CSLT) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Institutional & Insider Ownership

40.2% of Castlight Health, inc. shares are owned by institutional investors. 3.2% of athenahealth shares are owned by insiders. Comparatively, 37.4% of Castlight Health, inc. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares athenahealth and Castlight Health, inc.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
athenahealth $1.15 billion 4.91 $127.70 million $0.80 176.68
Castlight Health, inc. $115.24 million 4.40 -$48.77 million ($0.45) -8.56

athenahealth has higher revenue and earnings than Castlight Health, inc.. Castlight Health, inc. 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 athenahealth and Castlight Health, inc.’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%
Castlight Health, inc. -42.54% -36.30% -24.42%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for athenahealth and Castlight Health, inc., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
athenahealth 2 10 12 0 2.42
Castlight Health, inc. 1 4 2 0 2.14

athenahealth presently has a consensus price target of $147.38, suggesting a potential upside of 4.27%. Castlight Health, inc. has a consensus price target of $4.63, suggesting a potential upside of 20.13%. Given Castlight Health, inc.’s higher probable upside, analysts plainly believe Castlight Health, inc. is more favorable than athenahealth.

Risk and Volatility

athenahealth has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Castlight Health, inc. has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Summary

athenahealth beats Castlight Health, inc. on 10 of the 13 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.

Castlight Health, inc. Company Profile

Castlight Health, Inc. offers a health benefits platform that engages employees to make healthcare decisions, and enables employers to communicate and measure their benefit programs. The Company operates through cloud-based products segment. Its technology offering aggregates data and applies analytics to make healthcare data transparent. Its products deliver employee engagement and enable employers to integrate benefit programs into a single platform available to employees and their families. Its health benefits platform engages external data and its substantial user base to provide a single, end-to-end solution that engages employees through personalized and relevant communications. Its offering provides employers the opportunity to communicate, measure, and get value out of their benefits and programs on a real-time basis. It offers cross-sell products, such as Castlight Action, Castlight Pharmacy, Castlight Dental, Castlight Elevate, Castlight Protect and Castlight Rewards.

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