Results: Option Care Health, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Option Care Health, Inc. (NASDAQ:OPCH) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$1.3b arriving 5.2% ahead of forecasts. Statutory earnings per share (EPS) were US$0.32, 7.6% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Option Care Health

Following the latest results, Option Care Health's nine analysts are now forecasting revenues of US$5.26b in 2025. This would be a meaningful 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.6% to US$1.28. In the lead-up to this report, the analysts had been modelling revenues of US$5.26b and earnings per share (EPS) of US$1.37 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 17% to US$32.75, with reduced earnings forecasts clearly tied to a lower valuation estimate. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Option Care Health, with the most bullish analyst valuing it at US$42.00 and the most bearish at US$26.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Option Care Health's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.7% annually. Factoring in the forecast slowdown in growth, it looks like Option Care Health is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Option Care Health. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Option Care Health's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Option Care Health going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Option Care Health that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.