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Deutsche Bank Says MedAssets 'Wrestled Into Submission,' Downgrades To Hold

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In a report published Tuesday, Deutsche Bank analyst George Hill commented that MedAssets, Inc. (NASDAQ: MDAS) pre-announced fourth quarter results of $0.39 was one penny short of what he expected and the company's 2015 guidance resulted in a negative view of shares.

"Perhaps most unsettling is indications of increased price and margin compression in the core GPO segment, which forces us to question the sustainability of the company's margin structure," Hill wrote. "This instability is more than we can stomach."

Hill added that the poor guidance includes a decreased revenue growth rate, an unfavorable revenue mix weighted towards advisory solutions and a projected incentive comp of $10 million reflecting SCM under-performance in fiscal 2014. The analyst also added that it is not clear if a margin compression will persist on a forward basis.

As a result of the company's guidance, Hall downgraded shares to Hold from Buy with a price target lowered to $19 from a previous $23.

Shares were down more than 12 percent at $17.40.

Latest Ratings for MDAS

DateFirmActionFromTo
Jan 2016SunTrust Robinson HumphreyTerminatesNeutral
Nov 2015JP MorganAssumesNeutral
Nov 2015SunTrust Robinson HumphreyDowngradesBuyNeutral

View More Analyst Ratings for MDAS
View the Latest Analyst Ratings

 

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Posted-In: Deutsche Bank George Hill SCMAnalyst Color Downgrades Price Target Analyst Ratings

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