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Option Care Health Inc (OPCH)
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Option Care Health (OPCH) AI Stock Analysis

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OPCH

Option Care Health

(NASDAQ:OPCH)

Rating:69Neutral
Price Target:
$30.00
▲(4.93% Upside)
Option Care Health's overall stock score is driven by strong earnings call performance and solid financial health, despite technical analysis indicating bearish trends. The company's strategic initiatives and increased financial guidance are positive, but challenges in cash flow and leverage management need careful attention.
Positive Factors
Earnings
Option Care Health's revenue of $1.42 billion significantly outperformed estimates and demonstrated strong growth compared to the previous year, highlighting the company's ability to capture market share, especially in acute therapy.
Financial Guidance
FY/25 financial guidance was updated in a positive manner for the third time this year and now includes an expectation of $5.50-5.65 billion in revenue.
Investment Rating
The analyst maintains an OUTPERFORM investment rating on OPCH with a price target of $38, suggesting a significant upside potential for investors.
Negative Factors
External Risks
Option Care is potentially exposed to tariff risk through the drugs it utilizes in providing infusion services.
Gross Margin
Gross margin as a percentage came in slightly below expectations, although there was still an increase in gross margin dollars compared to the previous year.
Management Change
The departure of the long-serving CFO, Mike Shapiro, is unfortunate given his strong operational track record and consistent delivery of financial results ahead of expectations.

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

Option Care Health Business Overview & Revenue Model

Company DescriptionOption Care Health (OPCH) is a leading provider of home and alternate site infusion therapy services in the United States. The company specializes in delivering high-quality, patient-centric care through a wide range of infusion therapies, including antibiotics, biologics, and pain management, among others. Operating in the healthcare sector, Option Care Health focuses on enhancing patient outcomes while minimizing hospital stays by providing services in homes, outpatient centers, and other community settings.
How the Company Makes MoneyOption Care Health primarily generates revenue through the provision of infusion therapy services to patients covered by various insurance plans, including Medicare, Medicaid, and private payers. The company bills health insurers directly for the infusion services provided, receiving reimbursement based on established rates for different therapies. Key revenue streams include the administration of intravenous medications, nutritional support, and related supplies. Additionally, Option Care Health may enter into partnerships with healthcare providers and hospitals, enabling them to offer comprehensive care solutions, which can further enhance their revenue opportunities. The company also benefits from its ability to manage costs efficiently while maintaining high standards of care, contributing to its overall profitability.

Option Care Health Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong overall performance by Option Care Health, with significant revenue growth, increased financial guidance, and cash flow generation. Although there were some challenges related to Stelara's discontinuation and gross margin pressure, these were overshadowed by the company's strategic initiatives and effective execution across its portfolio.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Option Care Health reported a 15.4% revenue growth in the second quarter compared to the same period last year, driven by balanced growth across both acute and chronic therapy portfolios.
Increased Financial Guidance
The company increased its full-year guidance for revenue, adjusted EBITDA, and adjusted EPS due to strong first-half performance and ongoing momentum.
Significant Cash Flow Generation
Option Care Health generated over $90 million in cash flow from operations during the quarter and is on track to deliver more than $320 million for the full year.
Share Repurchase Program
The company executed $50 million in share repurchases during the quarter, demonstrating confidence in its long-term potential and commitment to returning value to shareholders.
Expansion of Clinical Capabilities
Investments in clinical resources, such as the advanced practitioner model and suite utilization, have driven a 20% increase in nurse productivity and broadened the patient portfolio.
Negative Updates
Impact of Stelara
The discontinuation of Stelara had a negative impact of approximately $20 million in the quarter, with expectations of $60-$70 million impact for the full year.
Gross Margin Pressure
Gross margin was negatively impacted by lower-margin limited distribution and rare and orphan therapies, although these contributed positively in gross profit dollars.
Regulatory and Market Uncertainty
Potential policy changes regarding tariffs, MFN pricing, and site neutrality remain uncertain, although the company believes these will not have a material financial impact in 2025.
Company Guidance
During the Option Care Health Second Quarter 2025 Earnings Conference Call, the company announced an increase in its full-year guidance for revenue, adjusted EBITDA, and adjusted EPS, reflecting its strong performance and confidence in ongoing momentum. The company reported a 15% revenue growth year-over-year, with both acute and chronic therapies growing in the mid-teens. Adjusted EBITDA grew by 5%, despite various headwinds. The company emphasized its strategic advantage in providing home and alternate site infusion services and highlighted its strong relationships with health plans and pharma partners. In terms of financial metrics, the company generated over $90 million in cash flow from operations in the second quarter and anticipates more than $320 million for the full year. Option Care Health expects full-year revenue to range from $5.5 billion to $5.65 billion, adjusted EBITDA between $465 million and $475 million, and adjusted EPS between $1.65 and $1.72. The company also executed $50 million in share repurchases during the quarter.

Option Care Health Financial Statement Overview

Summary
Option Care Health demonstrates strong financial performance with consistent revenue growth and robust cash flow generation. The company maintains low debt levels and a solid equity position, although there is room for improvement in net profitability and asset growth.
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.37B5.00B4.30B3.94B3.44B3.03B
Gross Profit1.06B1.01B981.22M866.92M779.61M682.26M
EBITDA408.35M396.13M483.16M345.81M252.30M182.66M
Net Income211.25M211.82M267.09M150.56M139.90M-8.08M
Balance Sheet
Total Assets3.38B3.42B3.22B3.11B2.79B2.65B
Cash, Cash Equivalents and Short-Term Investments198.82M412.56M343.85M294.19M119.42M99.27M
Total Debt1.23B1.22B1.17B1.16B1.16B1.21B
Total Liabilities2.02B2.02B1.80B1.73B1.62B1.63B
Stockholders Equity1.36B1.40B1.42B1.39B1.18B1.02B
Cash Flow
Free Cash Flow250.26M287.79M329.43M232.19M182.94M100.52M
Operating Cash Flow279.64M323.39M371.30M267.55M208.57M127.39M
Investing Cash Flow-156.59M-36.47M-56.51M-108.05M-111.54M-26.33M
Financing Cash Flow-301.11M-218.21M-265.13M15.27M-76.87M-68.85M

Option Care Health Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price28.59
Price Trends
50DMA
29.77
Negative
100DMA
31.00
Negative
200DMA
29.70
Negative
Market Momentum
MACD
-0.43
Negative
RSI
48.73
Neutral
STOCH
61.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPCH, the sentiment is Neutral. The current price of 28.59 is above the 20-day moving average (MA) of 28.24, below the 50-day MA of 29.77, and below the 200-day MA of 29.70, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 61.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
80
Outperform
$2.10B25.188.54%14.29%7.85%
76
Outperform
$9.85B30.6817.57%0.14%17.71%41.83%
73
Outperform
$12.28B23.8425.35%0.55%11.80%30.02%
73
Outperform
7.26%4.92%-7.34%
71
Outperform
$1.59B12.038.15%1.95%-16.10%-48.97%
69
Neutral
$4.53B22.7815.25%17.06%5.03%
51
Neutral
$7.83B-0.18-40.10%2.29%21.46%-2.03%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OPCH
Option Care Health
28.59
-3.06
-9.67%
ADUS
Addus Homecare
115.50
-15.58
-11.89%
AMED
Amedisys
100.99
3.07
3.14%
EHC
Encompass Health
123.58
32.57
35.79%
SEM
Select Medical
13.05
-6.03
-31.60%
ENSG
The Ensign Group
172.19
22.37
14.93%

Option Care Health Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Option Care Health Appoints New CFO Meenal Sethna
Positive
Aug 20, 2025

On August 20, 2025, Option Care Health announced the appointment of Meenal A. Sethna as Executive Vice President and Chief Financial Officer, effective October 1, 2025. Sethna, who previously held executive roles at Littelfuse, Inc. and Illinois Tool Works, will succeed Michael Shapiro, who will transition to a non-executive role until March 31, 2026. This leadership change is expected to support Option Care Health’s ongoing strategy and growth, as the company continues to strengthen its position as a leading provider of infusion therapy services.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 22, 2025