NEW YORK ( TheStreet) -- BioScrip (Nasdaq: BIOS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity, weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- The gross profit margin for BIOSCRIP INC is rather low; currently it is at 16.60%. Regardless of BIOS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BIOS's net profit margin of -14.90% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$27.31 million or 411.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, BIOSCRIP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, BIOS maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
- 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 significantly decreased by 264.8% when compared to the same quarter one year ago, falling from $40.69 million to -$67.07 million.