tiprankstipranks
Trending News
More News >
Option Care Health (OPCH)
NASDAQ:OPCH

Option Care Health (OPCH) AI Stock Analysis

Compare
446 Followers

Top Page

OP

Option Care Health

(NASDAQ:OPCH)

70Outperform
Option Care Health demonstrates strong financial performance with impressive revenue growth and improved profitability, which is offset by mixed technical indicators and a relatively high valuation. The earnings call provided a positive outlook, highlighting strategic acquisitions and shareholder initiatives, despite some anticipated profit headwinds. The overall score reflects a balanced view of the company's strengths and challenges.
Positive Factors
Financial Performance
Revenue of $1.35 billion easily beat our estimate of $1.29 billion, representing 19.7% growth versus last year’s comparable quarter.
Investor Confidence
Shares are up 50% and near all-time highs, indicating strong investor confidence.
Strategic Initiatives
The company announced a new $500m share repurchase authorization, indicating confidence in its cash flows.
Negative Factors
Drug Impact
The FDA approval of Vyvgart for self-administration is contributing to the underperformance of OPCH shares.
Margin Pressure
The soft gross margin is primarily related to Stelara-related headwinds.
Tariff Risk
The company is potentially exposed to tariff risk through the drugs it utilizes, which may be manufactured outside the U.S.

Option Care Health (OPCH) vs. S&P 500 (SPY)

Option Care Health Business Overview & Revenue Model

Company DescriptionOption Care Health, Inc. offers home and alternate site infusion services in the United States. The company provides anti-infective therapies; home infusion services to treat heart failures; home parenteral nutrition and enteral nutrition support services for numerous acute and chronic conditions, such as stroke, cancer, and gastrointestinal diseases; immunoglobulin infusion therapies for the treatment of immune deficiencies; and treatments for chronic inflammatory disorders, including Crohn's disease, plaque psoriasis, psoriatic arthritis, rheumatoid arthritis, ulcerative colitis, and other chronic inflammatory disorders. It also offers treatments to manage the progression of neurological disorders, such as amyotrophic lateral sclerosis and duchenne muscular dystrophy; infusion therapies for bleeding disorders; therapies that women need to survive and thrive through high-risk pregnancies; and other infusion therapies to treat various conditions, including pain management, chemotherapy, and respiratory medications, as well as nursing services. Option Care Health, Inc. is headquartered in Bannockburn, Illinois.
How the Company Makes MoneyOption Care Health generates revenue through its extensive portfolio of home and alternate site infusion services. The company's primary revenue streams include reimbursement from government and commercial insurance payers for providing infusion therapies and related services. Option Care Health collaborates with healthcare providers, hospitals, and pharmaceutical companies to deliver its services, ensuring accessibility and quality care for patients. Additionally, partnerships with pharmaceutical manufacturers allow the company to participate in the distribution and administration of specialty medications, further contributing to its earnings.

Option Care Health Financial Statement Overview

Summary
Option Care Health shows strong financial health with notable revenue growth and improved profitability. The reduction in debt enhances the balance sheet stability, and consistent cash flow generation supports operational resilience. However, recent fluctuations in net income and free cash flow warrant attention.
Income Statement
85
Very Positive
Option Care Health has demonstrated strong revenue growth over the years, with a notable increase in total revenue from $2.31 billion in 2019 to $4.99 billion in 2024. The gross profit margin has consistently improved, reflecting efficient cost management. While the net profit margin has been positive and improving, the decrease in net income from 2023 to 2024 is a slight concern. Overall, the company's income statement shows a robust upward trajectory, bolstering its profitability.
Balance Sheet
80
Positive
The company's balance sheet reveals a stable position with a significant decrease in total debt from 2023 to 2024. This reduction in leverage is a positive signal, enhancing financial stability. The equity ratio remains healthy, indicating a strong equity base relative to total assets. However, fluctuations in stockholders' equity from 2023 to 2024 suggest potential risks in maintaining consistent shareholder returns.
Cash Flow
78
Positive
Operating cash flow has seen a steady increase, indicating effective operational performance. The free cash flow has been consistently positive, supporting the company's ability to reinvest and pay down debt. Nevertheless, the decline in free cash flow from 2023 to 2024 raises questions about future growth financing. Overall, cash flow management remains solid but should be monitored for sustainability.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
5.00B4.30B3.94B3.44B3.03B
Gross Profit
1.01B981.22M866.92M779.61M682.26M
EBIT
321.83M314.60M240.23M190.84M110.75M
EBITDA
396.13M483.16M345.81M255.93M182.66M
Net Income Common Stockholders
211.82M267.09M150.56M139.90M-8.08M
Balance SheetCash, Cash Equivalents and Short-Term Investments
412.56M343.85M294.19M119.42M99.27M
Total Assets
3.42B3.22B3.11B2.79B2.65B
Total Debt
113.33M1.17B1.08B1.06B1.12B
Net Debt
-299.23M822.56M789.40M940.48M1.02B
Total Liabilities
2.02B1.80B1.73B1.62B1.63B
Stockholders Equity
1.40B1.42B1.39B1.18B1.02B
Cash FlowFree Cash Flow
323.39M329.43M232.19M182.94M100.52M
Operating Cash Flow
323.39M371.30M267.55M208.57M127.39M
Investing Cash Flow
-36.47M-56.51M-108.05M-111.54M-26.33M
Financing Cash Flow
-218.21M-265.13M15.27M-76.87M-68.85M

Option Care Health Technical Analysis

Technical Analysis Sentiment
Positive
Last Price32.90
Price Trends
50DMA
33.29
Negative
100DMA
29.86
Positive
200DMA
29.47
Positive
Market Momentum
MACD
-0.40
Positive
RSI
50.49
Neutral
STOCH
61.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPCH, the sentiment is Positive. The current price of 32.9 is below the 20-day moving average (MA) of 33.04, below the 50-day MA of 33.29, and above the 200-day MA of 29.47, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 50.49 is Neutral, neither overbought nor oversold. The STOCH value of 61.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OPCH.

Option Care Health Risk Analysis

Option Care Health disclosed 34 risk factors in its most recent earnings report. Option Care Health reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Option Care Health Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$7.24B24.6317.90%0.19%15.52%40.29%
70
Outperform
$5.40B26.8214.99%16.17%-17.16%
EHEHC
70
Outperform
$11.45B20.9525.35%0.56%11.21%30.49%
68
Neutral
$3.10B34.977.85%5.34%
68
Neutral
$1.83B23.758.78%9.06%10.68%
SESEM
67
Neutral
$2.24B10.0113.35%2.64%-0.63%-13.10%
51
Neutral
$5.32B3.41-40.36%2.89%17.93%2.52%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OPCH
Option Care Health
32.90
2.65
8.76%
ADUS
Addus Homecare
100.58
6.40
6.80%
AMED
Amedisys
94.50
2.66
2.90%
EHC
Encompass Health
113.37
30.32
36.51%
SEM
Select Medical
17.35
2.49
16.76%
ENSG
The Ensign Group
126.04
7.57
6.39%

Option Care Health Earnings Call Summary

Earnings Call Date:Feb 26, 2025
(Q4-2024)
|
% Change Since: 0.83%|
Next Earnings Date:Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, successful acquisitions, and effective supply chain management. Despite these positives, the company anticipates a significant profit impact from changes in Stelara's economics. However, the overall outlook remains positive due to strategic investments and shareholder value initiatives.
Q4-2024 Updates
Positive Updates
Strong Revenue Growth
Option Care Health reported a 19.7% revenue growth over Q4 2023, indicating a robust performance across its portfolio, particularly in rare and orphan therapies.
Successful Acquisition and Expansion
The company closed the acquisition of Intramed Plus, expanding its presence in the Southeastern United States and integrating advanced practitioner models in more than 175 infusion locations.
Share Repurchase Program
Option Care Health exhausted its previous $90 million share repurchase authorization and initiated a new $500 million authorization, demonstrating a strong balance sheet and shareholder value focus.
Improved Supply Chain Conditions
Significant improvement in IV solution supply dynamics allowed Option Care Health to onboard new patients more effectively.
Negative Updates
Impact of Stelara Dynamics
The company faces a $60 million to $70 million gross profit headwind in 2025 due to less favorable economics for Stelara.
Company Guidance
During the earnings call for the fourth quarter of 2024, Option Care Health provided guidance for 2025, projecting revenue between $5.3 billion and $5.5 billion, adjusted EBITDA ranging from $450 million to $470 million, and adjusted earnings per share of $1.59 to $1.69. Despite facing a $60 million to $70 million gross profit headwind from Stelara, the company anticipates overall earnings growth through its balanced portfolio. Notably, the company reported a strong fourth quarter in 2024 with a 19.7% revenue growth compared to the prior year, driven by high single-digit growth in acute therapies and contributions from rare and orphan therapies. The company's gross profit grew by 8.6% year-over-year, and they achieved an adjusted EBITDA of $121.6 million, marking a 9% increase. Furthermore, Option Care Health completed the acquisition of Intramed Plus in January 2025, enhancing its footprint with over 175 infusion locations, including advanced practitioner capabilities at 15 sites. This acquisition influenced the revised guidance for 2025, which also includes expectations to generate at least $320 million in cash flow from operations.

Option Care Health Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Option Care Health Announces Strong Growth and Share Repurchase
Positive
Jan 13, 2025

Option Care Health has announced preliminary financial results for the fourth quarter and full year 2024, with expected net revenue growth of up to 20.1% for the quarter and 16.2% for the year. The company also introduced a new $500 million stock repurchase program and provided guidance for 2025, anticipating revenues between $5.2 billion and $5.4 billion, despite expected negative impacts from pricing adjustments on Stelara. This reflects the company’s strategic efforts to enhance shareholder value and sustain growth in a competitive healthcare market.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.