It makes sense and dollars to buy Option Care Health Inc. (OPCH) stock

Option Care Health Inc. (NASDAQ: OPCH) stock fell -1.53% on Friday to $34.22 against a previous-day closing price of $34.75. With 1.86 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.1 million shares. During the session, the Medical Care Facilities company that operates in wider Healthcare sector, reached to the highest price of $34.64 whereas the lowest price it dropped to was $33.97. The 52-week range on OPCH shows that it touched its highest point at $35.57 and its lowest point at $20.20 during that stretch. It currently has a 1-year price target of $38.00. Beta for the stock currently stands at 1.33.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of OPCH was up-trending over the past week, with a rise of 0.85%, but this was up by 20.54% over a month. Three-month performance surged to 14.76% while six-month performance rose 46.62%. The stock gained 68.24% in the past year, while it has gained 20.32% so far this year. A look at the trailing 12-month EPS for OPCH yields 0.96 with Next year EPS estimates of 0.97. For the next quarter, that number is 0.21. This implies an EPS growth rate of 15.60% for this year and 22.26% for next year. EPS is expected to grow by 10.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 19.10%.

Float and Shares Shorts:

At present, 180.62 million OPCH shares are outstanding with a float of 142.34 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.6 million, which was 2.53% higher than short shares on Jun 14, 2022. In addition to Mr. John C. Rademacher as the firm’s CEO, Pres & Director, Mr. Michael H. Shapiro serves as its CFO & Sr. VP.

Institutional Ownership:

Through their ownership of 82.60% of OPCH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.87% of OPCH, in contrast to 30.23% held by mutual funds. Shares owned by individuals account for 21.25%. As the largest shareholder in OPCH with 9.38% of the stake, Fidelity Management & Research Co holds 16,880,827 shares worth 16,880,827. A second-largest stockholder of OPCH, BlackRock Fund Advisors, holds 15,005,854 shares, controlling over 8.33% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in OPCH, holding 13,708,480 shares or 7.61% stake. With a 2.36% stake in OPCH, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 4,243,477 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.23% of OPCH stock, is the second-largest Mutual Fund holder. It holds 4,007,733 shares valued at 111.37 million. Vanguard Small Cap Index Fund holds 2.02% of the stake in OPCH, owning 3,639,446 shares worth 101.14 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, OPCH reported revenue of $980.82M and operating income of $59.08M. Over the past year, revenue came in at $3.72B while operating income stood at $224.98M. It generated $33.93M net income for the quarter, which came to $175.15M over the last twelve months. The EBITDA in the recently reported quarter was $77.67M and diluted EPS was $0.19. EBITDA for the full year was $296.08M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for OPCH since 8 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With OPCH analysts setting a high price target of $45.00 and a low target of $31.00, the average target price over the next 12 months is $38.00. Based on these targets, OPCH could surge 31.5% to reach the target high and fall by -9.41% to reach the target low. Reaching the average price target will result in a growth of 11.05% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. OPCH will report FY 2022 earnings on 02/22/2023. Analysts have provided yearly estimates in a range of $1.00 being high and $0.71 being low. For OPCH, this leads to a yearly average estimate of $0.83. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Option Care Health Inc. surprised analysts by -$0.04 when it reported $0.19 EPS against a consensus estimate of $0.23. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.26 and the low estimate is $0.16. The average estimate for the next quarter is thus $0.22.

Summary of Insider Activity:

Insiders traded OPCH stock several times over the past three months with 11 Buys and 3 Sells. In these transactions, 82,706 shares were bought while 13,923 shares were sold. The number of buy transactions has increased to 19 while that of sell transactions has risen to 20 over the past year. The total number of shares bought during that period was 168,706 while 116,179,423 shares were sold.

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