BioScrip Raised to Outperform - Analyst Blog
10 Avril 2013 - 7:01PM
Zacks
On Apr 9, we upgraded our long-term recommendation on
BioScrip (BIOS) to Outperform from Neutral. The
upgradation is based on the avid outlook for 2013, strong potential
of its operating platforms and favorable market trends. We are
optimistic that this provider of infusion, home healthcare and
pharmacy benefit management (PBM) services can keep the momentum
going over the long haul.
Why the Upgrade?
As reported earlier, BioScrip’s revenue guidance for 2013 of
$830–$865 million, reflects growth in the range of 25% to 30% and
outpaced the then Zacks Consensus Estimate of $770 million. The
robust expectations are based on the solid ongoing growth momentum.
The company is confident about witnessing stronger business
momentum going forward on the back of strategic acquisitions.
On a segment basis, BioScrip has been recording persistent growth
in the Infusion Services segment over the past few quarters.
Further, the company surpassed its forecast of annual revenues of
$100–$105 million from the PBM franchise. BioScrip is taking
several strategic initiatives to bolster its business through
further market expansion.
BioScrip has significant opportunities for growth in three
operating areas with several catalysts to accelerate growth in the
future. Factors such as demographic tailwinds, increasing
healthcare coverage in the U.S. and a fast growing PBM industry are
material upsides for the company.
With respect to earnings trend, BioScrip delivered positive
earnings surprise in 2 of 4 quarters in 2012 with an average beat
of 100%. The Zacks Consensus Estimate for the first quarter 2013 is
currently pegged at 3 cents.
This drug store retailer carries a Zacks Rank #3 (Hold). Our
proven model does not conclusively show that BioScrip is likely to
beat earnings this quarter. This is because though the stock
carries Zacks Rank #3 (which increases the probability of positive
earnings surprise), Earnings ESP (Read: Zacks Earnings ESP: A
Better Method) is zero for the quarter.
Other Stocks to Consider
While we believe that the stock is an attractive long-term
investment, other healthcare stocks such as
Safeway (SWY), Cyberonics (CYBX)
and Cepheid (CPHD), carrying a Zacks Rank #1
(Strong Buy), are also worth considering.
BIOSCRIP INC (BIOS): Free Stock Analysis Report
CEPHEID INC (CPHD): Free Stock Analysis Report
CYBERONICS INC (CYBX): Free Stock Analysis Report
SAFEWAY INC (SWY): Free Stock Analysis Report
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