Healthcare Information Systems

HBO & Company

Products

HBO & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HBOC)") else Response.Write("(Nasdaq: HBOC)") end if %> offers one of the broadest product lines in the healthcare information systems industry, serving patient care, clinical, financial and strategic management needs. The company's Pathways 2000 client/server applications are designed to provide a common information infrastructure that enables organizations to collect, manage and disseminate clinically oriented information organized on the basis of a patient's entire history of care. The Pathways 2000 product line provides the capability to create longitudinal computerized patient records as well as connectivity along the entire continuum of care, enabling users to access patient data from any point within an integrated delivery system.

The Company

Through both acquisitions and internal development, HBO & Co. has managed to create an extraordinarily comprehensive menu of offerings. With the recent acquisition of AMISYS, the company obtained a high-end managed care product, and with the acquisition of Enterprise Systems, it gained an important materials management program that significantly expanded its product line.

Since the beginning of the decade, HBO stock has gone from a $4 to a split-adjusted $170, simultaneously moving from a $150 million market cap to its present $8.2 billion. Looking at the valuation of this industry leader it is easy to see why it is trading at 46x forward earnings and almost 9x sales. The company has no debt and $261 million in cash, and is ideally situated to capture the business of customers seeking "one stop shopping." Despite the attractiveness of its business position, HBO & Co. is clearly pushing the upper end of its valuation.

Latest Financials

The company posted second quarter and year-to-date revenue of $270.5 million and $516.5 million, increases over the previous year of 25% and 27% respectively. Second quarter and year-to-date earnings per share were $0.44 and $0.81, increases of 63% and 62% over the same periods last year, excluding all acquisition-related charges in 1996 and 1997. Including the acquisition-related charges of $35.4 million, EPS for the second quarter was $0.23.

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