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BioScrip, Inc. (BIOS)

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BioScrip, Inc. (BIOS) posted a disappointing quarter based on higher costs and tax. Although revenues grew by double-digits, driven by the CHS acquisition, the organic growth was below expectation.

Several issues spanning from manufacturer related, product recall and others impacted the company's margin during the quarter. On top of these issues, the highly leveraged balance sheet continues to be a drag on the bottom line. The company's interest expense increased substantially during the quarter based on its high debt level.

Amidst the backdrop of uncertainty, BioScrip has presently kept its outlook on hold. Given these factors, we would prefer to avoid the stock for the time being until further clarity is available regarding its future prospects. Accordingly, we downgrade the stock to Underperform.

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