OPCH

Option Care Health Inc. - Registered Shares

Healthcare


Presented:08/12/2024
Price:$30.54
Cap:$5.22B
Current Price:$30.61
Cap:$5.24B

Presented

Date08/12/2024
Price$30.54
Market Cap$5.22B
Ent Value$5.67B
P/E Ratio25.59x
Book Value$8.23
Div Yield0%
Shares O/S171.02M
Ave Daily Vol1,578,550
Short Int3.93%

Current

Price$30.61
Market Cap$5.24B
Option Care Health, Inc. engages in the provision of home and alternate site infusion services. The firm provides infusion therapy and other ancillary healthcare services through a national network of full-service pharmacies. The company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings. Its home infusion services consist of anti-infectives, nutrition support, bleeding disorder therapies, immunoglobulin therapy, and other therapies for chronic and acute conditions. The company was founded in 1996 and is headquartered in Bannockburn, IL.

Publicly traded companies mentioned herein: Option Care Health Inc (OPCH)

Highlights

The presenter is short shares of Option Care Health Inc (OPCH), which offers home infusion services and has been able to grow revenues 10%+ per year due to the secular trend of moving infusions out of hospitals and into patients’ homes. Providers and insurance companies prefer infusions done in a home setting when possible as it is cheaper than doing so in a hospital (no real estate overhead). OPCH does not disclose many details about its drug mix and the relative margins, so investors have simply hung their hats on consistent execution of the growth algorithm. The presenter believes 40% – 50% of OPCH’s revenue is now facing secular headwinds, but this impact on the growth algorithm has not been modeled by the Street since its coverage largely consists of services and facilities analysts rather than pharmaceutical analysts. As the headwinds shine through over the next several quarters, there is likely ~20% downside to the consensus 2025 EPS forecast of $1.46, and he expects a derating from the current 21x consensus 2025 EPS as it becomes clear that the historical growth algorithm is breaking. 

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Idea Discussion

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