July 25, 2012 / 3:12 PM / in 5 years

Healthways shares jump on profit beat

(Reuters) - Healthways Inc HWAY.O shares rose 26 percent after the healthcare management provider reported a quarterly profit that beat market expectations on an earlier-than-expected recognition of performance-based fees.

Thomas Carroll, an analyst with Stifel Nicolaus, said the management was upbeat during the post-earnings conference call “with a tone suggestive of continued visibility for new business and revenue growth for the remainder of year and into 2013.”

“Healthways represents a very interesting small-cap healthcare idea for the next 12 months,” Carroll said, raising his price target on the company’s stock to $13 from $10.

The company on Tuesday said it earned 15 cents per share in the second quarter. Analysts on average had expected 7 cents per share, according to Thomson Reuters I/B/E/S. [ID:nASA04IP9]

Barclays Capital raised its price target on the company’s stock to $8.00 from $6.00.

Shares of Healthways were trading up 20 percent at $10.12 in morning trade on the Nasdaq. They touched a nine-month high of $10.61 earlier.

Reporting by Shailesh Kuber in Bangalore; Editing by Sriraj Kalluvila

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