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Option Care Health (OPCH)
NASDAQ:OPCH

Option Care Health (OPCH) AI Stock Analysis

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Option Care Health

(NASDAQ:OPCH)

Rating:78Outperform
Price Target:
$37.00
▲(15.19%Upside)
Option Care Health's strong financial performance and positive earnings call outlook are significant strengths, driving the overall score. Technical indicators suggest short-term caution, and valuation metrics highlight a relatively high valuation. The absence of a dividend yield and governance changes are less impactful on the current score.
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)

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 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
85
Very Positive
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.
Balance Sheet
78
Positive
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.
Cash Flow
82
Very Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
5.19B5.00B4.30B3.94B3.44B3.03B
Gross Profit
1.02B1.01B981.22M866.92M779.61M682.26M
EBIT
331.99M321.83M314.60M240.23M190.84M110.75M
EBITDA
405.10M407.65M483.16M345.81M255.93M182.66M
Net Income Common Stockholders
213.77M211.82M267.09M150.56M139.90M-8.08M
Balance SheetCash, Cash Equivalents and Short-Term Investments
171.37M412.56M343.85M294.19M119.42M99.27M
Total Assets
3.31B3.42B3.22B3.11B2.79B2.65B
Total Debt
1.22B1.22B1.17B1.08B1.06B1.12B
Net Debt
1.05B805.41M822.56M789.40M940.48M1.02B
Total Liabilities
1.96B2.02B1.80B1.73B1.62B1.63B
Stockholders Equity
1.35B1.40B1.42B1.39B1.18B1.02B
Cash FlowFree Cash Flow
345.81M287.79M329.43M232.19M182.94M100.52M
Operating Cash Flow
384.96M323.39M371.30M267.55M208.57M127.39M
Investing Cash Flow
-157.34M-36.47M-56.51M-108.05M-111.54M-26.33M
Financing Cash Flow
-275.76M-218.21M-265.13M15.27M-76.87M-68.85M

Option Care Health Technical Analysis

Technical Analysis Sentiment
Negative
Last Price32.12
Price Trends
50DMA
33.03
Negative
100DMA
31.77
Positive
200DMA
29.68
Positive
Market Momentum
MACD
-0.13
Positive
RSI
47.65
Neutral
STOCH
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
$5.14B25.0915.38%16.98%-17.76%
78
Outperform
$8.31B27.1617.66%0.17%16.80%39.99%
77
Outperform
$2.06B25.349.18%11.38%10.29%
71
Outperform
$3.07B34.587.85%5.34%
EHEHC
68
Neutral
$11.98B24.5525.33%0.56%11.21%30.38%
SESEM
64
Neutral
$1.85B10.7110.38%3.04%-8.86%-36.22%
53
Neutral
$5.14B3.23-45.01%2.85%17.55%-0.69%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OPCH
Option Care Health
32.12
2.37
7.97%
ADUS
Addus Homecare
115.63
3.82
3.42%
AMED
Amedisys
93.99
-1.61
-1.68%
EHC
Encompass Health
121.01
38.13
46.01%
SEM
Select Medical
14.91
-2.74
-15.52%
ENSG
The Ensign Group
147.46
28.75
24.22%

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.