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Option Care Health (OPCH)
NASDAQ:OPCH
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Option Care Health
(NASDAQ:OPCH)
76Outperform
Positive Factors
Earnings
The adjusted EPS result of $0.40 easily exceeded the consensus expectation of $0.34.
Market Position
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.
Revenue Performance
Revenue of $1.33 billion solidly beat the consensus estimate of $1.26 billion, showing 16.3% growth versus last year’s comparable quarter.
Negative Factors
Pricing Headwinds
The company faces the impact of the Stelara pricing headwind.
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. S&P 500 (SPY)
Market Cap
$5.27B
Dividend YieldN/A
Average Volume (3M)2.37M
Price to Earnings (P/E)25.7
Beta (1Y)0.64
Revenue Growth16.98%
EPS Growth-17.76%
CountryUS
Employees6,015
SectorHealthcare
Sector Strength58
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)1.25
Shares Outstanding163,747,250
10 Day Avg. Volume2,735,041
30 Day Avg. Volume2,374,717
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.31
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.79
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.00Price Target Upside15.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
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 exhibits strong financial health with impressive revenue growth and improved profitability. The reduction in debt enhances the balance sheet, and consistent cash flow generation supports operational resilience. However, recent fluctuations in net income and free cash flow warrant attention. The company is in a strong position within the healthcare sector, with potential for further growth if current challenges are addressed effectively.Income Statement
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.85
Very Positive
Balance Sheet
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.80
Positive
Cash Flow
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.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.00B | 4.30B | 3.94B | 3.44B | 3.03B | Gross Profit |
| 1.01B | 981.22M | 866.92M | 779.61M | 682.26M | EBIT |
| 321.83M | 314.60M | 240.23M | 190.84M | 110.75M | EBITDA |
| 396.13M | 483.16M | 345.81M | 255.93M | 182.66M | Net Income Common Stockholders |
| 211.82M | 267.09M | 150.56M | 139.90M | -8.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 412.56M | 343.85M | 294.19M | 119.42M | 99.27M | Total Assets |
| 3.42B | 3.22B | 3.11B | 2.79B | 2.65B | Total Debt |
| 113.33M | 1.17B | 1.08B | 1.06B | 1.12B | Net Debt |
| -299.23M | 822.56M | 789.40M | 940.48M | 1.02B | Total Liabilities |
| 2.02B | 1.80B | 1.73B | 1.62B | 1.63B | Stockholders Equity |
| 1.40B | 1.42B | 1.39B | 1.18B | 1.02B |
| Cash Flow | Free Cash Flow | |||
| 323.39M | 329.43M | 232.19M | 182.94M | 100.52M | Operating Cash Flow |
| 323.39M | 371.30M | 267.55M | 208.57M | 127.39M | Investing Cash Flow |
| -36.47M | -56.51M | -108.05M | -111.54M | -26.33M | Financing Cash Flow |
| -218.21M | -265.13M | 15.27M | -76.87M | -68.85M |
Option Care Health Technical Analysis
Neutral
32.95
Price Trends
33.30
Negative
30.19
Positive
29.53
Positive
Market Momentum
-0.38
Positive
47.03
Neutral
50.31
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 32.95 is above the 20-day moving average (MA) of 32.47, below the 50-day MA of 33.30, and above the 200-day MA of 29.53, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 47.03 is Neutral, neither overbought nor oversold. The STOCH value of 50.31 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.61B | 24.86 | 17.66% | 0.19% | 16.80% | 39.99% | |
76 Outperform | $5.27B | 25.70 | 15.38% | ― | 16.98% | -17.76% | |
68 Neutral | $3.12B | 35.23 | 7.85% | ― | 5.34% | ― | |
68 Neutral | $11.76B | 24.10 | 25.35% | 0.57% | 11.21% | 30.49% | |
68 Neutral | $1.93B | 24.80 | 8.78% | ― | 9.06% | 10.68% | |
67 Neutral | $1.83B | 8.61 | 13.35% | 2.40% | -0.63% | -13.10% | |
52 Neutral | $5.36B | 3.88 | -42.93% | 2.87% | 17.85% | 1.45% |
* Healthcare Sector Average
Performance Comparison
OPCH
Option Care Health
32.95
3.14
10.53%
ADUS
Addus Homecare
105.00
6.80
6.92%
AMED
Amedisys
96.00
3.92
4.26%
EHC
Encompass Health
116.64
34.01
41.16%
SEM
Select Medical
14.26
-2.43
-14.56%
ENSG
The Ensign Group
132.32
15.65
13.41%
Option Care Health Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -0.06%|
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 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.