Why Bio-Reference Labs (BRLI) Stock Is Surging Today

NEW YORK (TheStreet) -- Bio-Reference Labs  (BRLI) surged Thursday after the company reported second-quarter earnings that surpassed analysts' expectations.

Bio-Reference Labs reported earnings of 37 cents a share, 5 cents greater than the Capital IQ Consensus Estimate of 32 cents a share. Revenues rose 14.1% year over year to $201.3 million, which beat the consensus estimate of $195.9 million.

The stock was up 17.44% to $31.45 at 2:49 p.m. Nearly 1.4 million shares had changed hands by that point, which easily surpassed the average volume of 282,730.

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TheStreet Ratings team rates BIO REFERENCE LABS as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BIO REFERENCE LABS (BRLI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its 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 deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 16.8%. Since the same quarter one year prior, revenues rose by 12.4%. 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 0.19 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 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 42.33% is the gross profit margin for BIO REFERENCE LABS which we consider to be strong. Regardless of BRLI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.62% trails the industry average.
  • Net operating cash flow has significantly decreased to -$2.75 million or 136.14% 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 significantly decreased by 65.9% when compared to the same quarter one year ago, falling from $8.67 million to $2.95 million.
  • You can view the full analysis from the report here: BRLI Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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