At US$25.88, Is Option Care Health, Inc. (NASDAQ:OPCH) Worth Looking At Closely?

By
Simply Wall St
Published
January 07, 2022
NasdaqGS:OPCH
Source: Shutterstock

While Option Care Health, Inc. (NASDAQ:OPCH) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$28.45 at one point, and dropping to the lows of US$23.72. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Option Care Health's current trading price of US$25.88 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Option Care Health’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Option Care Health

What is Option Care Health worth?

Good news, investors! Option Care Health is still a bargain right now. According to my valuation, the intrinsic value for the stock is $34.20, but it is currently trading at US$25.88 on the share market, meaning that there is still an opportunity to buy now. However, given that Option Care Health’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Option Care Health generate?

earnings-and-revenue-growth
NasdaqGS:OPCH Earnings and Revenue Growth January 7th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Option Care Health. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since OPCH is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on OPCH for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy OPCH. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you want to dive deeper into Option Care Health, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Option Care Health has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Option Care Health, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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