OPCH Stock Forecast & Price Target

Option Care Health Inc. showcased a robust financial performance, highlighted by an 8% year-over-year growth in gross profit, reaching $269 million, which exceeded prior estimates. The company's chronic therapy segment demonstrated significant growth, exceeding 10%, contributing to an overall positive outlook. Furthermore, Option Care Health revised its 2025 revenue forecast upward to a range of $5.5 billion to $5.65 billion, reflecting a 12% year-over-year increase at the midpoint, alongside an enhancement in its adjusted financial guidance for the same period.

Option Care Health Inc. faces significant challenges that contribute to a negative outlook on its stock, primarily due to rising general and administrative (G&A) expenses and the uncertain impact of the Stelara item on future earnings. The company's reliance on its largest customer, which accounts for 14% of its 2023 revenue, elevates the risk of revenue and profitability volatility in the event of losing this key account. Additionally, the limited potential for gross margin expansion, driven by the growth dynamics of chronic versus acute therapies, poses further concerns for future EBITDA margin improvement.