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.

NEW YORK (

TheStreet

)

-- Bio-Reference Laboratories

(Nasdaq:

BRLI

) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:

  • BRLI's revenue growth has slightly outpaced the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 17.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • BRLI's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRLI has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • BIO REFERENCE LABS's earnings per share declined by 13.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BIO REFERENCE LABS increased its bottom line by earning $1.65 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.65).
  • Net operating cash flow has significantly decreased to $0.69 million or 95.84% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has decreased by 13.7% when compared to the same quarter one year ago, dropping from $12.89 million to $11.12 million.

Bio-Reference Laboratories, Inc. provides clinical laboratory testing services for the detection, diagnosis, evaluation, monitoring, and treatment of diseases primarily in the greater New York metropolitan area. The company has a P/E ratio of 14.9, below the S&P 500 P/E ratio of 17.7. Bio-Reference has a market cap of $680.5 million and is part of the health care sector and health services industry. Shares are down 1.7% year to date as of the close of trading on Friday.

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