Robert W. Baird downgraded its rating on shares of MedAssets, Inc. (NASDAQ: MDAS) to neutral from outperform and lowered its price target to $18 from $24, on disappointing fourth quarter results and on annoying 2011 and long-term outlooks. MedAssets stock plunged 22.61 percent to $16.50 in the pre-market trading on the NASDAQ stock market.

MedAssets reported fourth quarter loss of $49.4 million or or $0.87 a share, compared to a profit of $10.0 million or $0.17 a share last year. Adjusted cash earnings were $0.18 a share, down from $0.28 a share. Revenue rose to $107.0 million from $95.7 million, while adjusted revenue grew to $120.4 million from $95.7 million. Analysts had expected profit of 22 cents a share on revenue of $122.17 million.

The company expects fiscal 2011 adjusted cash earnings of $0.94 to $1.04 a share and adjusted acquisition-affected revenue of $588 million to $602 million, while Street predicts profit of $1.14 a share on revenue of $626.20 million.

Fourth quarter disappointed and 2011 and long-term outlooks tempered. While adjusted EPS may grow about 20 percent, this is from a disappointing base and nominally well below the Street’s anticipation that results may trend toward the aggressive $1.27 internal goal, said Eric Coldwell, an analyst at Robert W. Baird.

Coldwell said while MedAssets may prove oversold on the breadth of the disappointment, there are too many new issues and external concerns to maintain a positive stance.

Coldwell said the company's long-term goals (post 2011) was tempered. The company expects revenue growth of 10 percent to 12 percent down from 15 percent, and cash earnings per share growth of 20 percent down from 25 percent.

Coldwell said the new items that concern him are: Execution issues -- the first known failure to meet incentives; Clients seeking higher performance hurdles from which to base incentives; Shift in services model to outsourcing deals from transformational tech transfer/advisory deals, and contract failures in transformational services deals; Underperformance in Decision Support Services (DSS); Customer losses, seemingly more than in past; and Heightened investment demands across solutions, infrastructure, and personnel.

Pessimists will continue to fear issues that didn’t materially impact fourth quarter or alter guidance, though generally worry us less. These themes include: Customer shift to EHR investment, away from RCM; Potential impact of Community Health Systems, Inc. (CYH) bid for Tenet Healthcare Corp. (THC); HCA’s plans to more aggressively compete in both MedAssets segments; and Debt leverage (5.4 times) following Broadlane deal, said Coldwell.