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Option Care Health Inc (OPCH)
:OPCH
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Option Care Health
(NASDAQ:OPCH)
Rating:78Outperform
Price Target:
$37.00
▲(15.19%Upside)
Positive Factors
Financial Performance
Option Care delivered an across-the-board beat in the first quarter with strong double-digit organic growth, marking the sixth consecutive quarter of top-line double-digit growth.
Guidance and Forecasts
FY/25 financial guidance was updated in a positive manner for the second quarter in a row.
Market Positioning
Growth in the quarter was driven by both Chronic and Acute as the business begins to benefit from a competitor exit in the space, which should provide a tailwind to growth.
Negative Factors
Pricing Headwinds
The soft gross margin is primarily related to Stelara-related headwinds.
Stock Performance
Despite the strong results, shares sold off throughout the day and ended down about 7%.
Tariff Concerns
The stock is pressured due to concerns that the potential tariffs on drugs could impact OPCH as it takes time for the payor reimbursement to catch up with higher drug prices.
Option Care Health (OPCH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.26B
Dividend YieldN/A
Average Volume (3M)2.38M
Price to Earnings (P/E)25.7
Beta (1Y)0.62
Revenue Growth16.98%
EPS Growth-17.76%
CountryUS
Employees8,000
SectorHealthcare
Sector Strength40
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.40
Shares Outstanding163,747,250
10 Day Avg. Volume1,630,560
30 Day Avg. Volume2,380,743
Financial Highlights & Ratios
PEG Ratio15.40
Price to Book (P/B)3.90
Price to Sales (P/S)0.00
P/FCF Ratio15.08
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue0.32
Enterprise Value/Gross Profit6.13
Enterprise Value/Ebitda4.01
Forecast
1Y Price Target
$38.50Price Target Upside19.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Option Care Health Business Overview & Revenue Model
Company DescriptionOption Care Health, Inc. (OPCH) is a leading provider of home and alternate site infusion services. The company operates in the healthcare sector, focusing on delivering high-quality, cost-effective infusion therapy solutions to patients across the United States. With a comprehensive network of infusion pharmacies and nursing support, Option Care Health offers a range of services, including home infusion therapy for chronic and acute health conditions, nursing support, and nutritional therapies.
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 Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -2.58%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Option Care Health reported strong first-quarter results with significant revenue and adjusted EBITDA growth. Strategic investments and successful integration of acquisitions highlight operational progress. While there are concerns regarding the economic impact of STELARA and potential tariffs, the company's positive guidance and strategic initiatives provide a stable outlook.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Option Care Health reported a 16% increase in revenue over the first quarter of last year, with mid-teens growth in acute therapies and high teens growth in chronic therapies.
Adjusted EBITDA Growth
The company achieved a 13.7% growth in adjusted EBITDA year-over-year, reflecting disciplined spending and strong top-line performance.
Strategic Investments
Investments included opening a new compounding pharmacy, three infusion clinics, enhancing technology, and expanding nursing capabilities.
Intramed Plus Acquisition Integration Success
The acquisition of Intramed Plus is on track to meet financial and operational goals, expanding care models and infusion clinic footprint.
Advanced Technology Implementation
The company expanded the use of robotic process automation and machine learning, improving revenue cycle management and cash collection velocity.
Positive Outlook and Guidance
For 2025, the company expects to generate revenue of $5.4 billion to $5.6 billion and adjusted EBITDA of $455 million to $470 million.
Share Repurchase Program
Repurchased $100 million of stock during the quarter, reflecting confidence in the company's financial health and future prospects.
Negative Updates
STELARA Gross Profit Impact
A projected $60 million to $70 million gross profit impact due to a reset in STELARA economics, with $5 million realized in Q1.
Tariff Uncertainty
Potential tariffs could affect the cost of medical supplies and pharmaceuticals, though the exact impact remains unclear.
Company Guidance
During the first quarter of 2025, Option Care Health demonstrated significant growth and strategic advancements, as highlighted in their earnings conference call. The company achieved a 16% increase in revenue compared to the previous year, driven by mid-teens growth in acute therapies and high-teens growth in chronic therapies. This performance contributed to a 13.7% year-over-year increase in adjusted EBITDA, reaching $111.8 million. The company also expanded its capabilities by opening a new compounding pharmacy, additional infusion clinics, and investing in technology and nursing resources. Despite potential economic uncertainties, such as proposed tariffs, Option Care Health increased the lower end of their full-year adjusted EBITDA guidance range, projecting revenues between $5.4 billion and $5.6 billion and adjusted EBITDA between $455 million and $470 million. The company also reported a strong balance sheet, enabling strategic investments, including the acquisition of Intramed Plus and a $100 million stock repurchase.Option Care Health Financial Statement Overview
Summary
Option Care Health demonstrates strong revenue growth and stable operational margins. The company maintains a low debt-to-equity ratio and generates robust cash flows. However, there is room for improvement in net profitability and asset growth to ensure long-term competitiveness.Income Statement
Option Care Health has demonstrated consistent revenue growth, with a strong TTM revenue of $5.19 billion, reflecting a growth rate of approximately 3.73% from the previous annual period. The company's gross profit margin has remained robust at around 19.72%. However, the net profit margin is modest at 4.12%, indicating room for improvement in profitability. The EBIT and EBITDA margins are stable at 6.40% and 7.25%, respectively, showcasing effective operational management.85
Very Positive
Balance Sheet
The balance sheet shows a solid equity base, with a debt-to-equity ratio of approximately 0.07 in the TTM period, indicating low leverage risk. The return on equity stands at 15.83%, demonstrating efficient utilization of shareholder funds. The equity ratio is healthy at 40.82%, suggesting a stable financial position. However, the decrease in total assets and equity from previous periods highlights the need for cautious financial management.78
Positive
Cash Flow
Option Care Health has exhibited strong cash flow performance, with a 23.38% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is 1.80, suggesting strong cash generation relative to net income. The free cash flow to net income ratio of 1.66 further underscores the company's ability to generate substantial free cash flow. Despite this, a focus on maintaining positive investing cash flows is advisable to ensure long-term sustainability.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.19B | 5.00B | 4.30B | 3.94B | 3.44B | 3.03B | Gross Profit |
| 1.02B | 1.01B | 981.22M | 866.92M | 779.61M | 682.26M | EBIT |
| 331.99M | 321.83M | 314.60M | 240.23M | 190.84M | 110.75M | EBITDA |
| 405.10M | 407.65M | 483.16M | 345.81M | 255.93M | 182.66M | Net Income Common Stockholders |
| 213.77M | 211.82M | 267.09M | 150.56M | 139.90M | -8.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 171.37M | 412.56M | 343.85M | 294.19M | 119.42M | 99.27M | Total Assets |
| 3.31B | 3.42B | 3.22B | 3.11B | 2.79B | 2.65B | Total Debt |
| 1.22B | 1.22B | 1.17B | 1.08B | 1.06B | 1.12B | Net Debt |
| 1.05B | 805.41M | 822.56M | 789.40M | 940.48M | 1.02B | Total Liabilities |
| 1.96B | 2.02B | 1.80B | 1.73B | 1.62B | 1.63B | Stockholders Equity |
| 1.35B | 1.40B | 1.42B | 1.39B | 1.18B | 1.02B |
| Cash Flow | Free Cash Flow | ||||
| 345.81M | 287.79M | 329.43M | 232.19M | 182.94M | 100.52M | Operating Cash Flow |
| 384.96M | 323.39M | 371.30M | 267.55M | 208.57M | 127.39M | Investing Cash Flow |
| -157.34M | -36.47M | -56.51M | -108.05M | -111.54M | -26.33M | Financing Cash Flow |
| -275.76M | -218.21M | -265.13M | 15.27M | -76.87M | -68.85M |
Option Care Health Technical Analysis
Negative
32.12
Price Trends
33.03
Negative
31.77
Positive
29.68
Positive
Market Momentum
-0.13
Positive
47.65
Neutral
27.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPCH, the sentiment is Negative. The current price of 32.12 is below the 20-day moving average (MA) of 32.30, below the 50-day MA of 33.03, and above the 200-day MA of 29.68, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 47.65 is Neutral, neither overbought nor oversold. The STOCH value of 27.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 1 New Risks
1.
Our business depends on our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations. Q4, 2024
Option Care Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.26B | 25.66 | 15.38% | ― | 16.98% | -17.76% | |
78 Outperform | $8.48B | 27.70 | 17.66% | 0.17% | 16.80% | 39.99% | |
77 Outperform | $2.13B | 25.59 | 9.18% | ― | 11.38% | 10.29% | |
71 Outperform | $3.07B | 34.58 | 7.85% | ― | 5.34% | ― | |
68 Neutral | $12.20B | 24.98 | 25.33% | 0.56% | 11.21% | 30.38% | |
64 Neutral | $1.92B | 11.10 | 10.38% | 3.04% | -8.86% | -36.22% | |
53 Neutral | $5.14B | 3.23 | -45.01% | 2.85% | 17.55% | -0.69% |
* Healthcare Sector Average
Performance Comparison
OPCH
Option Care Health
32.12
2.57
8.70%
ADUS
Addus Homecare
113.27
2.33
2.10%
AMED
Amedisys
93.99
-1.61
-1.68%
EHC
Encompass Health
121.01
37.37
44.68%
SEM
Select Medical
14.91
-2.82
-15.91%
ENSG
The Ensign Group
147.46
30.93
26.54%
Option Care Health Corporate Events
Shareholder MeetingsBusiness Operations and Strategy
Option Care Health Approves Governance Amendments at Annual Meeting
Positive
May 16, 2025
At the 2025 Annual Meeting of Stockholders held on May 14, 2025, Option Care Health‘s Board of Directors approved amendments to the company’s Certificate of Incorporation and Bylaws. These changes include allowing stockholders to request special meetings, limiting monetary liability for certain officers, and removing outdated provisions related to HC Group. The stockholders also elected directors, ratified KPMG LLP as the accounting firm, and approved executive compensation, reflecting a strategic shift to enhance governance and shareholder rights.
The most recent analyst rating on (OPCH) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on Option Care Health stock, see the OPCH Stock Forecast page.
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.