Zacks Investment Research downgraded shares of BioScrip, Inc. (BIOS) from NEUTRAL to UNDERPERFORM on July 10, 2014, with a target price of $6.75.
Once again, in the first quarter of 2014, BioScrip delivered a poor bottom-line show. Adjusted net loss from continuing operations of $0.17 per share was much wider than the year-ago adjusted loss per share of $0.01. The results also considerably lagged the Zacks Consensus Estimate of a loss of $0.04. The high-margin PBM business witnessed another quarter of massive downfall, impacted by lower discount cards revenue and the termination of a large contract. This also resulted in a decline in gross profit margin. Growing SG&A expenses following the company's effort to consolidate recent takeovers adds to our concerns. Meanwhile, reimbursement pressure looms as a potent cause of worry. The competitive landscape is also tough with the presence of larger players. With the dearth of any major near-term catalyst, we downgrade the stock to Underperform.
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