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BioScrip (BIOS) Gains on CORE Initiatives, Competition Rife

Zacks

On Aug 10, we issued an updated research report on Elmsford, NY-based BioScrip, Inc. BIOS. The company is a leading Infusion Service provider and strives to deliver cost-effective programs to patients. The stock currently has a Zacks Rank #2 (Buy).

Over the last three months, BioScrip has been trading above the broader industry. The stock has gained 78.0%, comparing favorably with the 4.9% decline of the broader industry.

BioScrip exited the second quarter with wider-than-expected adjusted net loss and a revenue miss. Management’s unimpressive 2017 guidance, which includes the negative impact of the Cures Act legislation, adds to our concerns. Nonetheless, the market is upbeat about BioScrip’s announcement to continue to offer certain core product lines to UnitedHealthcare. Also, stiff competition raises concern.


On a positive note, we are encouraged by the company’s recent progress, courtesy of its new multi-faceted CORE plan which was adopted to improve the financial position. Further, the company achieved annualized supply chain improvement of roughly $20 million since the acquisition of Home Solutions.

BioScrip currently operates in an attractive market with favorable industry dynamics and positive fundamentals. In particular, market forces, developing patient management technologies and the aging U.S. population are driving growth opportunities for home health service providers like BioScrip. With the healthcare landscape rapidly changing, the company is focused on boosting its core Infusion Services platform through a clinically-focused and customer-orientated model.

Other Key Picks

Other top-ranked medical stocks are Edwards Lifesciences Corp. EW, Steris Plc STE and Align Technology, Inc. ALGN. Edwards Lifesciences and Align Technology sport a Zacks Rank #1 (Strong Buy), while Steris carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 26.6%. The stock has added roughly 24.6% over the last three months.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has gained around 3.2% over the last three months.

Steris posted a stellar four-quarter average earnings surprise of 0.8%. The stock has added roughly 12.9% over the last three months.

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