KabaFusion expands with Coram site acquisitions, OPCH target at $36

On Monday, Citizens JMP reiterated a Market Outperform rating and a $36.00 price target for Option Care Health (NASDAQ: NASDAQ:OPCH), which currently trades at $33.07. The move comes in the wake of KabaFusion’s recent acquisition of six Coram locations, which include pharmacies and ambulatory infusion suites. According to InvestingPro data, OPCH has demonstrated impressive momentum with a 47% price return over the past six months, and analysts maintain a bullish consensus with price targets ranging from $34 to $41. The acquisition, announced on Monday, broadens KabaFusion’s reach in Nevada and marks its entry into five new markets: Connecticut, Georgia, Oklahoma, South Carolina, and Washington. KabaFusion’s network now comprises 32 infusion pharmacies and 19 ambulatory infusion suites.

The expansion follows CVS Health’s (NYSE:CVS, NC) decision in October 2024 to divest a significant portion of its infusion services business, particularly those related to acute therapies. KabaFusion’s acquisition of Coram assets is not a novel strategy; the company had previously purchased other Coram infusion assets in 2022, which significantly expanded its infusion service footprint at the time.

The strategic acquisitions by KabaFusion are expected to enhance its service capabilities and market presence. The analyst from Citizens JMP highlighted the growth potential for Option Care Health in the context of the industry’s evolving landscape. The $36.00 price target suggests confidence in the company’s future performance.

Option Care Health is a leading provider of home and alternate site infusion services, with a market capitalization of $5.42 billion and strong revenue growth of 17% in the last twelve months. With the healthcare industry increasingly moving towards more convenient and cost-effective treatment options, companies like Option Care Health are well-positioned to meet the growing demand for their services. InvestingPro analysis reveals the company maintains a GREAT financial health score, supported by solid profitability metrics and strong market performance. For deeper insights into OPCH’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

As the industry continues to evolve with these developments, Option Care Health remains a company to watch in the home infusion services market. Trading near its 52-week high of $35.53, the stock has demonstrated resilience and growth potential. The reiterated Market Outperform rating and price target reflect a positive outlook for the company’s stock amidst the industry’s ongoing transformations.

In other recent news, Option Care Health reported its first-quarter 2025 financial results, showcasing significant revenue and earnings growth. The company’s revenue reached $1.33 billion, marking a 16% increase year-over-year, surpassing both JMP Securities’ estimate of $1.25 billion and the consensus estimate of $1.26 billion. Earnings per share (EPS) also exceeded expectations, coming in at $0.40 compared to the forecasted $0.33. Gross profit increased by 10% year-over-year to $263 million, while adjusted EBITDA rose by 14% to $111.8 million, indicating strong operational performance.

Analyst activity has been positive following the earnings release. UBS upgraded Option Care Health’s stock from Neutral to Buy, raising the price target to $40.00 from $38.00, citing the company’s strong earnings momentum and potential for future growth. JMP Securities maintained a Market Outperform rating with a price target of $36.00, reflecting confidence in the company’s financial trajectory.

Despite these positive developments, Option Care Health’s stock saw a decline in pre-market trading, a movement attributed to broader market conditions rather than the company’s performance. The company continues to expand its operational capabilities, having opened three new infusion clinics and enhanced its technology infrastructure. Looking forward, Option Care Health forecasts 2025 revenue between $5.4 billion and $5.6 billion, with adjusted EPS projected between $1.61 and $1.70, maintaining a cautiously optimistic outlook amid potential challenges such as tariff impacts and inventory management related to the drug STELARA.

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