Shares of Accretive Health Inc. bounced back Friday, a day after the company posted its third-quarter results and saw its shares sink to their lowest level since its initial public offering.
THE SPARK: The company, which helps hospital systems manage their revenue cycles, on Thursday reported revenue that fell about $14 million short of analyst estimates.
Accretive Health also said its full-year revenue will be between $595 million and $607 million, which was $32 million to $44 million less than Wall Street expected. Its stock fell as much as 14.9 percent during the day, reaching a low of $8.30. The shares closed at $9, down 7.7 percent.
THE ANALYSIS: On Friday, analysts took a more positive view. Corey Tobin of William Blair & Co. said Accretive Health is still winning new business, noting the company did not change its guidance on the value of the contracts it will be handling at the end of the year. Accretive Health said its contracts will be worth more than $710 million at the end of the 2010. It also maintained its forecast for adjusted profit before interest, taxes, depreciation and amortization.
Tobin kept a "Market Perform" rating on Accretive Health's shares.
SHARE ACTION: Shares of the Chicago company rose 75 cents, or 8.3 percent, to $9.75 in afternoon trading. The company completed its initial public offering in May and its shares have traded as high as $15.21.