Option Care Health, Inc. (OPCH) | Investment Case

1. Company Snapshot

1.a. Company Description

Option 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.

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1.b. Last Insights on OPCH

Option Care Health, Inc.'s recent performance was positively driven by its Q3 earnings beat, with quarterly earnings of $0.45 per share exceeding the Zacks Consensus Estimate of $0.43 per share. The company's presentation at the UBS Global Healthcare Conference 2025 also garnered attention from investors. Additionally, institutional investors such as Bailard Inc. and Ethic Inc. have been increasing their stakes in the company, with Bailard Inc. boosting its holdings by 40.4%. The company's solid financial results and growing investor interest have contributed to its positive momentum.

1.c. Company Highlights

Last Price	29.89
Change Percentage	-0.02%
Open	29.88
Previous Close	29.89
Market Cap ( Millions)	4924
Volume	1343928
Year High	35.53
Year Low	22.29
M A 50	28.12
M A 200	30.49

FCF Yield	5.04%
Dividend Yield	0.00%
ROE	15.29%
Debt / Equity	8.92%
Net Debt / EBIDTA	-41.15%
Price To Book	3.59
Price Earnings Ratio	23.34
Price To FCF	19.83
Price To sales	0.89
EV / EBITDA	10.33

2. Option Care Health Delivers Strong Q3 2025 Results

Option Care Health reported revenue growth of 12% year-over-year, with acute therapy growth in the mid-teens and chronic therapies growing in the low double digits. The company's adjusted EPS came in at $0.45, beating estimates of $0.43. The revenue guidance for the year remains at $5.6 billion to $5.65 billion, with adjusted EBITDA of $468 million to $473 million and adjusted earnings per share of $1.68 to $1.72. The company's financial performance was highlighted by its ability to continue capitalizing on its national network and local responsiveness, driving growth in its acute therapy segment.

Publication Date: Nov -03

                                    📋 Highlights
                                    Revenue Growth:
                                                12% YoY increase, with acute therapy growth in mid-teens and chronic therapies in low double digits.
2025 Guidance:
                                                Revenue of $5.6B–$5.65B, adjusted EBITDA of $468M–$473M, and adjusted EPS of $1.68–$1.72.
Stelara Biosimilar Impact:
                                                2025 annual revenue impact of ~$70M, with price step-down expected in 2026 and no 2026 guidance provided.
Advanced Practitioner Model:
                                                24 facilities capable of advanced services; expansion planned via greenfield and complementary pharmacy investments.
G&A Expenses:
                                                10% TTM increase driven by debt refinancing, M&A, and growth investments, with leverage sequentially reduced year-over-year.

                                

Financial Performance

The company's financial performance was driven by its ability to expand its advanced practitioner model, investing in technology, artificial intelligence, and advanced analytics. Meenal Sethna, Chief Financial Officer, noted that the company refinanced its debt, adding some noise to its G&A expenses, but saw benefits in cash flow, with leverage down sequentially and year-over-year. The company's G&A expenses were up 10% on a TTM basis, driven by Intramed acquisition costs, variable comp, and investments in growth.

Growth Prospects

Analysts estimate next year's revenue growth at 7.7%. The company's guidance for 2026 is not available, but it expects to grow despite the impact of the Stelara biosimilar. John Rademacher, President and Chief Executive Officer, noted that the company is working through dynamics, including census, product uptake, and biosim impact, and expects the Stelara impact to be similar to Q2, around $20 million, and closer to $70 million for the year.

Valuation

Using the company's current valuation metrics, we can see that the P/E Ratio is 20.33, P/B Ratio is 3.13, and EV/EBITDA is 8.94. The company's Return on Equity (ROE) is 15.29%, indicating a relatively strong return on shareholders' equity. The Net Debt / EBITDA ratio is -0.41, indicating a healthy debt position. These metrics suggest that the company's valuation is reasonable, but investors should consider the potential impact of the Stelara biosimilar on future growth.

Capital Allocation

The company prioritizes investing in itself through organic growth, technology investments, and expanding its scale. It also focuses on acquisitions that add capabilities to its portfolio, particularly in near adjacencies and tuck-ins. Share buybacks are less of a priority, but the company aims to return capital to shareholders. The company's disciplined approach to capital allocation is expected to drive future growth and create value for shareholders.

3. NewsRoom

Option Care Health, Inc. (OPCH) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -02

Source: seekingalpha.com

Franklin Resources Inc. Reduces Stock Holdings in Option Care Health, Inc. $OPCH

Dec -02

Source: defenseworld.net

Advantage Alpha Capital Partners LP Cuts Stake in Option Care Health, Inc. $OPCH

Nov -28

Source: defenseworld.net

Touchstone Small Company Fund Q3 2025 Performance Review

Nov -27

Source: seekingalpha.com

Aristides Capital LLC Takes $249,000 Position in Option Care Health, Inc. $OPCH

Nov -27

Source: defenseworld.net

Option Care Health (NASDAQ:OPCH) Stock Unloaded Rep. Lisa C. McClain

Nov -27

Source: defenseworld.net

Option Care Health, Inc. $OPCH Shares Purchased by Bailard Inc.

Nov -15

Source: defenseworld.net

Option Care Health, Inc. (OPCH) Presents at UBS Global Healthcare Conference 2025 Transcript

Nov -11

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Infusion Services

Expected Growth: 8%

Option Care Health's Infusion Services growth is driven by increasing demand for home-based care, expansion into new markets, and strategic partnerships. Additionally, the company's investment in technology and clinical expertise has improved patient outcomes, leading to higher patient retention and referrals. Furthermore, the growing need for cost-effective healthcare solutions and the shift towards value-based care are also contributing to the segment's 8% growth.

7. Detailed Products

Infusion Therapy

Option Care Health provides infusion therapy services for patients with acute and chronic conditions, including antibiotics, pain management, and nutrition support.

Home Infusion Pharmacy

Option Care Health offers a comprehensive home infusion pharmacy service, providing medications and supplies for patients with complex conditions.

Nurse Advocacy

Option Care Health provides nurse advocacy services, supporting patients and caregivers with education, guidance, and coordination of care.

Disease Management

Option Care Health offers disease management programs for patients with chronic conditions, including diabetes, heart failure, and chronic obstructive pulmonary disease (COPD).

Nutrition Support

Option Care Health provides nutrition support services, including total parenteral nutrition (TPN) and enteral nutrition, for patients with complex nutritional needs.

Wound Care

Option Care Health offers wound care services, including negative pressure wound therapy and debridement, for patients with complex wounds.

8. Option Care Health, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Option Care Health, Inc. faces moderate threat from substitutes due to the presence of alternative healthcare providers and home infusion therapy services.

Bargaining Power Of Customers

Customers have limited bargaining power due to the specialized nature of Option Care Health, Inc.'s services and the lack of alternative providers.

Bargaining Power Of Suppliers

Suppliers of medical equipment and pharmaceuticals have moderate bargaining power due to the presence of multiple suppliers and the company's dependence on these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including regulatory hurdles and the need for specialized expertise and equipment.

Intensity Of Rivalry

The home infusion therapy industry is highly competitive, with multiple players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	43.19%
Debt Cost	7.17%
Equity Weight	56.81%
Equity Cost	10.54%
WACC	9.08%
Leverage	76.03%

11. Quality Control: Option Care Health, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Amedisys

A-Score: 5.2/10

Value: 4.0

Growth: 4.6

Quality: 6.9

Yield: 0.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

Ensign Group

A-Score: 5.0/10

Value: 2.0

Growth: 7.6

Quality: 4.4

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Option Care Health

A-Score: 4.4/10

Value: 4.5

Growth: 7.3

Quality: 5.2

Yield: 0.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

Chemed

A-Score: 4.2/10

Value: 2.9

Growth: 6.1

Quality: 7.3

Yield: 0.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

Select Medical

A-Score: 3.8/10

Value: 6.8

Growth: 4.3

Quality: 2.5

Yield: 3.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Acadia Healthcare

A-Score: 3.0/10

Value: 5.6

Growth: 4.1

Quality: 4.8

Yield: 0.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.34%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.08%

Option Care Health, Inc. - US68404L2016

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on OPCH

1.c. Company Highlights

Less Volatile

Higher Growth

Expensive

Earnings Beats

Revenues Beats

Fairly Valued

Stable Momentum

Average Growth

Medium Volatility

Better Quality

Revenues Miss

2. Option Care Health Delivers Strong Q3 2025 Results

Financial Performance

Growth Prospects

Valuation

Capital Allocation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.00%)

6. Segments

Infusion Services

Expected Growth: 8%

7. Detailed Products

Infusion Therapy

Home Infusion Pharmacy

Nurse Advocacy

Disease Management

Nutrition Support

Wound Care

8. Option Care Health, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Option Care Health, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.89$

Current Price

29.89$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA