On Apr 9, we upgraded our long-term recommendation on
) 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
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
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.
BIOSCRIP INC (BIOS): Free Stock Analysis
CEPHEID INC (CPHD): Free Stock Analysis
CYBERONICS INC (CYBX): Free Stock Analysis
SAFEWAY INC (SWY): Free Stock Analysis Report
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Other Stocks to Consider
While we believe that the stock is an attractive long-term
investment, other healthcare stocks such as
), carrying a Zacks Rank #1 (Strong Buy), are also worth