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Why Is BioScrip (BIOS) Down 5.6% Since its Last Earnings Report?

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It has been about a month since the last earnings report for BioScrip, Inc. (BIOS - Free Report) . Shares have lost about 5.6% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is BIOS due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Recent Earnings

BioScrip reported adjusted net loss from continuing operations of 15 cents per share in the fourth quarter of 2017, wider than both the Zacks Consensus Estimate and the year-ago loss of 8 cents each.

Reported net loss from continuing operations for the period came in at 58 cents a share, wider than the year-earlier loss of 46 cents.

Revenues

With the completion of non-core PBM business divestment, BioScrip now has a simplified business structure focused on core Infusion Services.
Net revenues for the quarter under review were $182.6 million, a 23.9% decline year over year. This huge downside resulted from the company’s shift in strategy to focus on growing its core revenue mix. This apart, the impact of the Cures Act and contract modifications with UnitedHealthcare (completed as of Sep 30, 2017) were major deterrents.  However, the top line exceeded the Zacks Consensus Estimate of $172 million.

Notably, net revenues in the fourth quarter included core product mix of 75.7%, an improvement from 69.6% in the prior-year period.

Gross margin for the reported time frame expanded 740 basis points (bps) year over year to 38.5%.This significant upside was driven by seasonal revenue strength leveraging the company’s infrastructure and reduced product cost. Operating expenses were $53.5 million, an 18% reduction from the tally in fourth-quarter 2016.

Financials

BioScrip exited 2017 with cash and cash equivalents of $39.5 million compared with $9.6 million at the end of 2016.

2018 Guidance

For 2018, the company has provided revenue view in the range of $710-$720 million. The Zacks Consensus Estimate of $722.13 million for the metric lies above the company’s guided range.

Additionally, BioScrip expects to incur restructuring expenses in the band of $5-$6 million in 2018, primarily reflecting costs related to redesigning and optimizing its revenue cycle management process. The company also expects 2018 capital expenditures between $12 million and $14 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. In the past month, the consensus estimate has shifted by 23.8% due to these changes.

BioScrip, Inc. Price and Consensus

VGM Scores

At this time, BIOS has a strong Growth Score of A, though it is lagging a lot on the momentum front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

BIOS has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.




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