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Option Care Health (OPCH)
NASDAQ:OPCH
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Option Care Health
(NASDAQ:OPCH)
77Outperform
Positive Factors
Company Strategy
The company announced a new $500m share repurchase authorization, indicating confidence in its cash flows.
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.
Negative Factors
Earnings Risk
The Stelara headwind is expected to be a gross profit headwind of about $60 million-$70 million.
Option Care Health (OPCH) vs. S&P 500 (SPY)
Market Cap
$5.44B
Dividend YieldN/A
Average Volume (3M)1.70M
Price to Earnings (P/E)26.3
Beta (1Y)0.86
Revenue Growth16.17%
EPS Growth-17.16%
CountryUS
Employees7,802
SectorHealthcare
Sector Strength78
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)1.23
Shares Outstanding165,315,960
10 Day Avg. Volume2,134,115
30 Day Avg. Volume1,697,953
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.09
Price to Cash Flow (P/CF)37.60
P/FCF Ratio37.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.43Price Target Upside16.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Option Care Health Business Overview & Revenue Model
Company DescriptionOption Care Health, Inc. provides home and alternate site infusion services. The company was founded in 1996 and is headquartered in Bannockburn, IL.
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
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
Positive
32.89
Price Trends
30.31
Positive
27.32
Positive
28.71
Positive
Market Momentum
0.79
Positive
49.36
Neutral
8.72
Positive
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 32.89 is below the 20-day moving average (MA) of 32.98, above the 50-day MA of 30.31, and above the 200-day MA of 28.71, indicating a neutral trend. The MACD of 0.79 indicates Positive momentum. The RSI at 49.36 is Neutral, neither overbought nor oversold. The STOCH value of 8.72 is Positive, 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.44B | 26.28 | 14.99% | ― | 16.17% | -17.16% | |
73 Outperform | $79.66B | 14.71 | -230.22% | 0.81% | 8.67% | 15.32% | |
72 Outperform | $9.77B | 21.75 | 24.52% | 0.68% | 11.91% | 28.47% | |
67 Neutral | $3.02B | 71.11 | 3.93% | ― | 5.01% | ― | |
66 Neutral | $2.17B | 10.13 | 13.35% | 2.98% | -0.63% | -13.10% | |
64 Neutral | $1.72B | 21.98 | 8.78% | ― | 9.06% | 10.68% | |
49 Neutral | $6.84B | 0.05 | -53.14% | 2.48% | 24.49% | -3.26% |
* Healthcare Sector Average
Performance Comparison
OPCH
Option Care Health
32.24
0.44
1.38%
ADUS
Addus Homecare
90.78
-7.27
-7.41%
AMED
Amedisys
92.59
-0.19
-0.20%
HCA
HCA Healthcare
314.79
-8.13
-2.52%
EHC
Encompass Health
93.68
19.12
25.64%
SEM
Select Medical
16.58
1.60
10.68%
Option Care Health Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 0.80% | Next Earnings Date: Apr 23, 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.Highlights
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.
Lowlights
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.