In a slow economy, it’s so hard to find companies capable of scorching growth. The only companies you should be researching — if you’re looking to double or triple your money — are the ones that aim to revolutionize an industry. 

Medical software firm athenahealth (Nasdaq: ATHN) has done just that. The company helps doctors automate their billing practices while enabling the migration to electronic medical records.

#-ad_banner-#As more doctors have signed on, the company’s revenue base has surged. In fact, it has risen at least 30% in seven straight years. I’m not sure you’ll find another publicly-traded company with so many years of sustained growth like that. 

Despite this track record, it took awhile for investors to catch on. Shares only took off near the end of 2010, but have been on steroids ever since.

Yet such a fast-growing company invariably runs into the same problem that many have before it. Growth inevitably slows, and when it happens, momentum investors run for the exits and go in search of the next hot growth stock. Amazingly, athenahealth shows no signs of cooling off. Analysts say sales will grow 30% this year, again in 2013 and in 2014 as well.

Yet it’s the composition of this growth that has some analysts concerned. Up until now, the fastest-growing part of athenahealth’s business has been its billing software segment, known as athenaCollector. As it has comprised an increasing percentage of sales, this company’s gross margins have soared: They exceeded 50% for the first time in 2006, and have since risen every year to a recent 62%.

Trouble is, the fastest-growing division for the company is now “Clinicals,” which is the electronic medical records segment. This segment isn’t just software. There’s a lot of hand-holding that goes into supporting each physician practice. “With athenaClinicals, the tasks surrounding the point of care requires far more labor hours per physician, like fax scanning and upload, lab image uploads, as well as customer support,” note analysts at Sterne Agee. 

As a result, this company’s never-ending surge in gross margins looks to be near an end, which is a crucial consideration for growth stocks.

Let me digress a moment. At the end of the 1990s, I recall watching a segment on CNBC where a guest was discussing the seemingly ideal path taken by Dell’s (Nasdaq: DELL) gross margins and its stock price. These two items were overlaid against each other in a chart and it was an exact fit. Rising gross margins are a clear sign that a company is generating more sales from its various cost components. When margins peaked for Dell soon thereafter, so did its stock price. 

Are athenahealth’s margins about to slump? It bears watching. It’s the absence of further margin gains that will force investors to give this stock fresh scrutiny. And when investors see that this stock trades for a stunning 80 times projected 2012 earnings per share (of around $1) and around 60 times projected 2013 EPS of around $1.30, they will come to see that this is one of the most richly-valued stocks on the market — in a stock market that doesn’t look all that healthy anyway.

Investors may also be in for a surprise when it comes to sales growth, having grown accustomed to 30% growth. That’s because competition is starting to build. For example, privately-held CareCloud has begun to attract more interest from physicians. “The company offers a more flexible approach to the revenue cycle and a much friendlier and intuitive user interface,” according to analysts at Auriga Securities. 

Insiders have already voted with their feet. They started selling this stock back when it was in the $50s and have been selling ever since. Since June 2011, insiders have sold more than 16 million shares. They now control around 2.5% of company stock, less than half of what they owned a year ago.

Risks to Consider: This is already a heavily-shorted stock, with the current short interest of 9 million shares representing 19 days of trading volume, so you may need to ride out a short squeeze if you decide to go short.

Action to Take –> So what does the downside look like for this stock? Analysts at Sterne Agee see it falling from a recent $80 to $68 because they suspect sustained future growth targets may be hard to come by. Auriga’s analysts see shares falling even lower to just $58, or more than 25% below current levels. This price equates to 46 times projected 2013 EPS of $1.26.