QUALCOMM, Inc. (QCOM), athenahealth, Inc (ATHN): Is WebMD Health Corp. (WBMD) Destined for Greatness?

athenahealth, Inc (NASDAQ:ATHN) has recently emerged as another potential threat. Early this year, the physician-services company acquired Epocrates for $293 million, which will enable it to establish a strong presence in the health-based mobile applications area. Keith notes that Epocrates’ massive customer base (which includes 50% of all physicians in the United States) and strong brand recognition will provide immediate competition when paired with athenahealth, Inc (NASDAQ:ATHN)’s greater resources. However, neither athenahealth, Inc (NASDAQ:ATHN) nor WebMD has a clear financial advantage at the moment — the two companies are effectively neck and neck in terms of net income, which is more a result of WebMD’s continual bottom-line erosion than athenahealth, Inc (NASDAQ:ATHN)’s strengths.

WebMD has recently announced a $5 million cash-return program for shareholders, which is expected to wrap up by the end of the third quarter. Last year, the company also decided to cut 250 jobs, thereby reducing its overall workforce by 14% to save approximately $45 million in operating expenses. However, the ongoing patent cliff might crimp sales growth, as much of WebMD’s revenue comes from the advertisements of major pharmaceutical companies.

Putting the pieces together
Today, WebMD Health Corp. (NASDAQ:WBMD) has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is WebMD Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends Athenahealth and owns shares of Qualcomm.

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