Business 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.
Business History
Generated: Jun 7, 2026 2:08pmPrice Overview
Last updated: Jun 3, 2026 8:18pm (23d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 1.28
Total Equity: $1.33B
Shares: 163,365,000
Total Debt: $0.00
Cash: $232.62M
EBITDA: $408.60M
Total Debt: $0.00
Cash: $232.62M
Revenue: $5.65B
Revenue: $5.65B
Revenue: $5.65B
Total Equity: $1.33B
Tax Rate: 26.6%
Equity: $1.33B
Total Debt: $0.00
Cash: $232.62M
Current Liabilities: $829.35M
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $1.33B
Shares: 163,365,000
Shares: 163,365,000
CapEx: $0.00
Shares: 163,365,000
Stock Price: $20.53
Net Income: $207.59M
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
Option Care has the hallmarks of a well-run mature earner: revenue compounded from $3.44B (2021) to $5.65B (2025), FCF has run $183M–$329M annually with OCF/NI of 1.49x and accruals of -2.8% of assets — earnings are backed by cash. Balance sheet is sound (Altman Z 3.02, $233M liquid, net cash positive) and the company is a genuine net buyer of stock: diluted share count fell from 181.2M to 163.4M (-2.6% CAGR), with buyback/SBC of 611% meaning SBC is more than offset.
The concern is the profit trajectory. Gross margin has compressed every year since 2023: 22.8% → 20.3% → 18.1%, a ~470bp give-back in two years on a business model where GM is already thin. Operating margin peaked at 7.3% in 2023 and slipped to 6.0% in 2025, and net income actually declined from $267M (2023) to $208M (2025) despite revenue growing ~31% over that span. Revenue growth is masking that incremental dollars are coming in at materially lower profitability — classic signs of payer pricing pressure, drug-mix shift toward lower-margin therapies, or referral-channel concentration in home infusion.
Management behavior is constructive: real buybacks, modest SBC (0.7% of revenue), and recent insider activity skews to net buying ($4.5M bought vs $1.2M sold over 12 months), though the recent tape is dominated by routine awards. No accounting red flags (Beneish -2.36). This is a quality business, but margin erosion keeps it out of the top tier.
Verify before trusting this (6)
- 10-K disclosure on therapy mix shift — is the GM compression from chronic vs acute mix, or from specific high-volume drugs (e.g., IG, biologics) with declining gross profit per unit?
- Payer concentration and any recent contract repricing with major commercial payers or Medicare Advantage plans
- Referral-source concentration (health systems, specialty pharmacies) and any disclosed loss of key referral relationships
- Whether buybacks were funded by FCF or debt — check change in long-term debt vs buyback spend
- Management commentary on whether 18% GM is the new floor or a transitional drag from acquired/onboarded volume
- Any pending or recent CMS/Medicare reimbursement changes affecting home infusion
The e2e composite FV of $49 and signal-adjusted FV of $63 imply 200%+ upside, but those numbers fail the sanity check: they require the recent margin compression (~470bp gross margin decline in 24 months, net income lower in 2025 than 2023 on +33% revenue) to fully reverse. I don't underwrite that. The EPV floor of $19.79 — essentially today's price — is the more honest anchor: it says the market is paying for current earnings power and nothing more, which matches a fallen-angel setup where growth and margin recovery are priced at zero.
Deserved value, in my head, sits somewhere between the EPV floor and a haircut DCF — call it $25-$30 on a normalized basis, giving high-quality earnings (EQ score 3) and a shrinking share count credit, but penalizing the margin trend. Against $20.51 that's a ~20-40% gap — real, but not a fat pitch given the deteriorating fundamentals doing the discounting. Buybacks at this price are accretive, which is a tailwind that supports the 'modestly cheap' read rather than a 'deep value' call.
Verify before trusting this (5)
- Gross margin trajectory in next 1-2 quarters — stabilization vs further compression is the whole thesis
- 2026 guidance on revenue growth and margin recovery cadence
- Any disclosure on therapy mix shift (Stelara biosimilar, GLP-1s) driving the GM decline
- Buyback pace at current price levels
- Payer concentration / reimbursement pressure commentary on call
The dominant pressure on OPCH is narrative, not macro. The story is a fallen-angel: market has decided management cannot grow the top line, and the April 30 Q1 revenue miss (just 1.3% YoY) crystallized that view with a 30% gap-down that still defines the tape for this name. Intensity is strong, durability is fragile, and there is no cult bid to defend the stock - meaning any further disappointment gets sold immediately while good news gets faded. Analyst tone is the clearest divergence: 12 Buys, 2 Holds, target $31.22 vs $22.08 price - a 41% implied upside that the market is openly ignoring. That gap is itself a headwind signal: when sell-side is bullish and the tape will not follow, it means flows and sentiment are the binding constraint, not valuation. Macro is a minor factor here. Beta 0.65 and a defensive home-infusion business mean the neutral-to-slightly-stressed tape (VIX 17, 10y 4.55%) lands softly on OPCH; this is not a name being dragged down by the index. The pressure is idiosyncratic and story-driven, which is why it persists even on quiet market days.
Verify before trusting this (4)
- Next quarterly print - any revenue reacceleration above 3% could crack the fallen-angel story
- Analyst revisions trend - if Buys start cutting to Holds, the divergence resolves the wrong way
- Sector rotation into defensive healthcare on any risk-off escalation
- Any M&A chatter or strategic review - the classic fallen-angel re-rating catalyst
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 3, 2026 7:33pm (23d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.4B | $3.9B | $4.3B | $5.0B | $5.6B |
| Cost of Revenue | $2.7B | $3.1B | $3.3B | $4.0B | $4.6B |
| Gross Profit | $779.6M | $866.9M | $981.2M | $1.0B | $1.0B |
| Operating Expenses | $588.8M | $626.7M | $666.6M | $691.2M | $682.5M |
| Operating Income | $190.8M | $240.2M | $314.6M | $321.8M | $337.9M |
| Net Income | $139.9M | $150.6M | $267.1M | $211.8M | $207.6M |
| EBITDA | $252.3M | $325.0M | $472.2M | $396.1M | $408.6M |
| EPS | $0.78 | $0.83 | $1.49 | $1.23 | $1.28 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 3, 2026 7:27pm (23d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $119.4M | $294.2M | $343.8M | $412.6M | $232.6M |
| Total Current Assets | $710.3M | $994.3M | $1.1B | $1.3B | $1.3B |
| Total Assets | $2.9B | $3.2B | $3.3B | $3.4B | $3.5B |
| Current Liabilities | $459.7M | $565.4M | $618.3M | $780.1M | $829.3M |
| Long-Term Debt | $1.1B | $1.1B | $1.1B | $1.1B | $0 |
| Total Liabilities | $1.7B | $1.8B | $1.9B | $2.0B | $2.1B |
| Total Equity | $1.2B | $1.4B | $1.4B | $1.4B | $1.3B |
| Retained Earnings | $39.9M | $190.4M | $457.5M | $669.3M | $0 |
Cash Flow (Annual)
Last updated: Jun 3, 2026 7:33pm (23d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $208.6M | $267.5M | $371.3M | $323.4M | $258.4M |
| Capital Expenditure | -$25.6M | -$35.4M | -$41.9M | -$35.6M | $0 |
| Free Cash Flow | $182.9M | $232.2M | $329.4M | $287.8M | $258.4M |
| Acquisitions (net) | -$85.9M | -$87.4M | -$12.5M | $0 | -$117.2M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | $-32,000 | $0 | -$250.3M | -$252.7M | -$310.0M |
| Net Change in Cash | $20.2M | $174.8M | $49.7M | $68.7M | -$179.9M |
Analyst Estimates (Annual)
Last updated: Jun 3, 2026 7:27pm (23d ago)| Metric | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|
| Revenue |
$6.1B $6.1B – $6.2B
|
$6.7B $6.7B – $6.7B
|
$7.2B $7.1B – $7.3B
|
$7.7B $7.6B – $7.8B
|
| EBITDA |
$511.6M $506.6M – $516.6M
|
$555.9M $555.9M – $555.9M
|
$601.2M $595.7M – $607.9M
|
$642.5M $636.6M – $649.6M
|
| Net Income |
$338.0M $326.4M – $349.5M
|
$378.4M $356.3M – $400.5M
|
$406.8M $401.9M – $412.6M
|
$450.9M $445.5M – $457.3M
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 3, 2026 7:33pm (23d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +14.7% | +9.1% | +16.2% | +13.0% |
| Gross Profit Growth | +11.2% | +13.2% | +3.2% | +0.7% |
| Operating Income Growth | +25.9% | +31.0% | +2.3% | +5.0% |
| Net Income Growth | +7.6% | +77.4% | -20.7% | -2.0% |
| EBITDA Growth | +28.8% | +45.3% | -16.1% | +3.1% |
Insider Trading (Recent)
Last updated: Jun 3, 2026 7:32pm (23d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-20 | Bierbower Elizabeth D | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | Deckmann Natasha | A-Award | 844.00 | $22.23 | $18,762 |
| 2026-05-20 | Deckmann Natasha | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | KRAEMER HARRY M JANSEN JR | A-Award | 12,079.00 | $22.23 | $268,516 |
| 2026-05-20 | KRAEMER HARRY M JANSEN JR | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | Pate R Carter | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | SULLIVAN TIMOTHY P | A-Award | 4,836.00 | $22.23 | $107,504 |
| 2026-05-20 | SULLIVAN TIMOTHY P | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | Bodem Barbara W. | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | Wright Norman L. | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-20 | BRANDT ERIC | A-Award | 2,643.00 | $22.23 | $58,754 |
| 2026-05-20 | BRANDT ERIC | A-Award | 8,997.00 | $0.00 | $0 |
| 2026-05-19 | Smyser Collin | M-Exempt | 812.00 | $0.00 | $0 |
| 2026-05-19 | Smyser Collin | F-InKind | 360.00 | $20.86 | $7,510 |
| 2026-05-19 | Smyser Collin | M-Exempt | 812.00 | $0.00 | $0 |
| 2026-05-07 | SULLIVAN TIMOTHY P | P-Purchase | 24,154.00 | $20.69 | $499,671 |
| 2026-05-04 | KRAEMER HARRY M JANSEN JR | P-Purchase | 36,610.00 | $21.41 | $783,773 |
| 2026-05-04 | Sethna Meenal | P-Purchase | 16,225.00 | $20.16 | $327,075 |
| 2026-05-04 | RADEMACHER JOHN CHARLES | P-Purchase | 12,500.00 | $21.18 | $264,706 |
| 2026-04-22 | Adewunmi Femi | F-InKind | 1,396.00 | $28.38 | $39,618 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
Looking at the raw numbers first: revenue grew from $3.44B (2021) to $5.65B (2025) — a 13% CAGR that's still intact, with the trailing four quarters at ~$5.68B. But net income tells a less flattering story: $267M in 2023, $212M in 2024, $208M in 2025. Margins compressed from 6.2% net in 2023 to 3.7% TTM. Gross margin collapsed from ~22.8% to 18.1%. This is the classic "growing into a thinner business" pattern — every incremental dollar of revenue is generating fewer cents of profit. The Q1 2026 print ($1.35B rev, 3.4% margin) shows no inflection. That said, FCF of $258M on a $3.22B market cap is a real 8% yield, and EV/EBITDA of 7.5x with ROIC of 9.3% isn't distressed-pricing — it's mature-business pricing.
Where I disagree with the prior models: the synthesis "fair value $49–$62" against a $20.51 price implying 200%+ upside is preposterous as stated and the synthesis itself flags the methods disagree. A DCF that anchors to 2023's $267M peak earnings and assumes mean reversion to ~22% gross margins is doing most of the lifting. If you instead anchor to TTM economics ($208M NI, $258M FCF, no margin recovery), a 12–14x P/E on a no-growth-in-earnings business gets you $16–$19, i.e., the stock is roughly fairly priced or modestly cheap, not 3x undervalued. The "fallen angel" narrative framing is directionally right but the magnitude is fantasy. Market Forces correctly flags payor vertical integration (Optum/CVS/Express Scripts increasingly own home infusion assets) as the existential risk — that's the real bear case, not generic "execution."
The contrarian-to-the-contrarians argument: gross margin compression from 22.8% → 18.1% over three years while revenue grew 31% is almost certainly mix shift toward lower-margin chronic therapies and reimbursement step-downs on legacy drugs (Stelara biosimilar exposure, IVIG pricing), not operational dysfunction. That's not cyclical and won't snap back. The bull case requires you to believe either (a) the mix stabilizes and incremental revenue carries normal drop-through, or (b) OPCH gets acquired — and a strategic (UNH, CVS) paying 8–10x EBITDA gets you to $28–$33. The insider activity is uninformative — all A-Awards dated the same day are routine equity comp grants, not buying conviction. Flagging "Net Insider Buying" off that is a model error.
Data quality concerns: the balance sheet tile is missing total debt and total equity, which matters because OPCH carried ~$1.1B in net debt historically and ev_to_ebitda of 7.5x depends on that. If leverage has crept up funding the HC Pharma acquisition, the equity story is riskier than the multiples suggest. The "2026-03-31" quarterly label is also suspicious — likely a fiscal labeling artifact, but worth verifying. Sector "in contraction" callout conflicts with the bull thesis on aging-demographic tailwinds; both can't be right and I'd bet sector growth is fine but unit economics are deteriorating industry-wide as payors squeeze.
Net: I dissent from the synthesis $62 fair value. I dissent from "Disconnected from Fundamentals" — the market is pricing this correctly as a business whose earnings power peaked in 2023 and where the payor counterparty is becoming the competitor. But I also dissent from outright bearishness: 8% FCF yield, 15.6x P/E, 7.5x EV/EBITDA, and a real M&A floor make this a reasonable value name, not a value trap, provided leverage isn't a surprise. Fair value $22–$26 on standalone fundamentals, with optionality to $30+ on strategic takeout. At $20.51 you're paid to wait but you're not getting a fat margin of safety — and the margin trajectory needs to stabilize within 2 quarters or the thesis erodes further.
GPT Critique
Option Care Health, Inc. (OPCH) presents an intriguing case of robust revenue growth against a backdrop of declining profitability. The company has seen its revenue climb from $3.44 billion in 2021 to $5.65 billion in 2025, representing a compound annual growth rate (CAGR) of approximately 13%. This growth trajectory is commendable, but the concurrent decline in net income from $267 million in 2023 to $208 million in 2025 signals a concerning trend of margin compression. The gross margin has notably dropped from 22.8% to 18.1%, reflecting possible issues in the company's pricing power or cost management as it scales. The company's free cash flow yield of 8% and an EV/EBITDA ratio of 7.5x suggest a mature business with stable cash generation, yet the market's skepticism is evident in its current valuation, which seems to reflect concerns of ongoing margin compression and competitive pressures.
I align with Opus's skepticism regarding the synthesis's valuation of $49 to $62, which appears overly optimistic. I agree with Opus that such a valuation likely relies on assumptions of margin recovery that are not currently supported by the available data. The synthesis's fair value estimate seems to ignore the persistent margin pressures and assumes a return to peak earnings conditions, which do not align with the recent financial trajectory. I concur with Opus's more conservative valuation of $22 to $26, reflecting a more realistic appraisal of OPCH's current financial health and market conditions. This range accounts for the company's stable cash flow and potential strategic acquisition appeal, without overestimating the likelihood of a significant turnaround in profitability.
However, I diverge slightly from Opus on the potential impact of margin compression being solely attributed to mix shift and reimbursement issues. While these factors certainly contribute, the consistency of revenue growth suggests that operational efficiencies or strategic shifts could eventually stabilize margins. Thus, while I agree with Opus that the payor vertical integration presents a significant risk, I am slightly more optimistic about the potential for margin stabilization as the company continues to adapt its business model.
A careful skeptic might argue that both Opus and I are underappreciating the potential for OPCH to leverage its revenue growth into improved profitability through operational efficiencies or strategic partnerships. They might also highlight that the sector's contraction narrative could be overblown given the demographic tailwinds and the shift towards home care, which could eventually counteract the current margin pressures.