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Leerink Partners Reiterates Market Perform on MedAssets (MDAS) Following a Workforce Reduction Announcement

September 30, 2015 10:48 AM EDT
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Price: $31.35 --0%

Rating Summary:
    3 Buy, 20 Hold, 2 Sell

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Leerink Partners reiterated a Market Perform rating on MedAssets (NASDAQ: MDAS) following the company's announcement that it is reducing its workforce by approximately 180 full-time employees by the end of 2015. The company expects annualized cost savings of ~$21M and MDAS should start to see this benefit in 4Q:15.

Analyst David Larsen commented, "This morning MedAssets announced that the company is reducing its workforce by approximately 180 full-time employees, or about 5% of its total headcount, by the end of 2015. The company expects annualized cost savings of ~$21M and MDAS should start to see this benefit in 4Q:15. The ~$5M of incremental cost savings in 4Q:15 represents ~$0.04-0.05 of EPS upside to 2015. Given the transition of ~215 FTEs to Tenet (MP) and this ~180 FTE reduction, we believe that the announcement this morning will more than offset the Tenet loss. However, we don’t expect the news to drive a meaningful change to our 2016 estimates which do not yet reflect the ~$0.20 headwind from the loss of Tenet (previously announced). In our view some 2016 sell-side estimates reflect the Tenet loss, but some do not. As a result, 2016E consensus EPS will likely rise over time."

For an analyst ratings summary and ratings history on MedAssets click here. For more ratings news on MedAssets click here.

Shares of MedAssets closed at $19.15 yesterday.



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