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Dull Q1 Earnings & Tough Industry Spell Trouble for BioScrip
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On May 10, we issued an updated research report on BioScrip, Inc. , a pure-play Infusion Service provider. BioScrip, in partnership with healthcare players, pharmaceutical manufacturers, government agencies and physicians, strives to deliver cost-effective programs to patients. The company currently has a Zacks Rank #4 (Sell).
BioScrip posted a dismal first quarter, with earnings and sales missing the Zacks Consensus Estimate. The year-over-year decline in revenues was partly due to lower-than-expected core sales volumes.
Also, for the majority of the last one year, BioScrip has been trading below the Zacks categorized Medical Output/Homecare industry. The stock has lost 34.6% to date, comparing unfavorably with the 0.2% gain of the broader industry.
Of late, the restricted spending by many states on Medicare raises apprehension over the company’s prospects. The reason behind the cutbacks is slow revenue growth and rising Medicaid concerns. The Cures Act legislation passed in Dec 2016 has resulted in a significant reduction in Medicare reimbursement rates on certain drugs effective Jan 1. Hence, BioScrip’s 2017 guidance lacks luster as it takes the estimated negative impact of the Cures Act legislation into account.
Moreover, the healthcare industry is highly competitive. BioScrip’s competitors include large and well-established companies that have higher financial, marketing and technological resources.
On a positive note, BioScrip currently operates in a market which has favorable dynamics and solid fundamentals. BioScrip’s CORE initiatives also encourage us as it focuses on identifying and executing strategies to accelerate core revenue growth. Also, BioScrip has been steadily growing its Infusion Services business, which lends it a competitive advantage over peers.
Zacks Rank & Key Picks
Better-ranked medical stocks include Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Baxter International Inc. (BAX - Free Report) . Regeneron Pharmaceuticals and Bio-Rad Laboratories sport a Zacks Rank 1 (Strong Buy), while Baxter International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals rose 18% in the last one year, in comparison to the S&P 500’s 16.0%. It has a trailing four-quarter average positive earnings surprise of 0.45%.
Bio-Rad Laboratories surged 55.7% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 13.10%.
Baxter International rose 23.1% in the last one year, in comparison to the S&P 500. It has a four-quarter average positive earnings surprise of 17.14%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Dull Q1 Earnings & Tough Industry Spell Trouble for BioScrip
On May 10, we issued an updated research report on BioScrip, Inc. , a pure-play Infusion Service provider. BioScrip, in partnership with healthcare players, pharmaceutical manufacturers, government agencies and physicians, strives to deliver cost-effective programs to patients. The company currently has a Zacks Rank #4 (Sell).
BioScrip posted a dismal first quarter, with earnings and sales missing the Zacks Consensus Estimate. The year-over-year decline in revenues was partly due to lower-than-expected core sales volumes.
Also, for the majority of the last one year, BioScrip has been trading below the Zacks categorized Medical Output/Homecare industry. The stock has lost 34.6% to date, comparing unfavorably with the 0.2% gain of the broader industry.
Of late, the restricted spending by many states on Medicare raises apprehension over the company’s prospects. The reason behind the cutbacks is slow revenue growth and rising Medicaid concerns. The Cures Act legislation passed in Dec 2016 has resulted in a significant reduction in Medicare reimbursement rates on certain drugs effective Jan 1. Hence, BioScrip’s 2017 guidance lacks luster as it takes the estimated negative impact of the Cures Act legislation into account.
Moreover, the healthcare industry is highly competitive. BioScrip’s competitors include large and well-established companies that have higher financial, marketing and technological resources.
On a positive note, BioScrip currently operates in a market which has favorable dynamics and solid fundamentals. BioScrip’s CORE initiatives also encourage us as it focuses on identifying and executing strategies to accelerate core revenue growth. Also, BioScrip has been steadily growing its Infusion Services business, which lends it a competitive advantage over peers.
Zacks Rank & Key Picks
Better-ranked medical stocks include Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Baxter International Inc. (BAX - Free Report) . Regeneron Pharmaceuticals and Bio-Rad Laboratories sport a Zacks Rank 1 (Strong Buy), while Baxter International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Regeneron Pharmaceuticals rose 18% in the last one year, in comparison to the S&P 500’s 16.0%. It has a trailing four-quarter average positive earnings surprise of 0.45%.
Bio-Rad Laboratories surged 55.7% in the past one year, better than the S&P 500 mark. It has a four-quarter average earnings surprise of 13.10%.
Baxter International rose 23.1% in the last one year, in comparison to the S&P 500. It has a four-quarter average positive earnings surprise of 17.14%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>