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BANNOCKBURN, Ill. - Option Care Health, Inc. (NASDAQ:OPCH), a leading provider of home and alternate site infusion services with a market capitalization of $4.08 billion and an "GREAT" financial health score according to InvestingPro, has released its preliminary unaudited financial results for the fourth quarter and the full year ended December 31, 2024, today. The company anticipates a significant increase in net revenue and net income, with projections showing net revenue between $1.34 billion and $1.35 billion for Q4, marking a growth of 19.2% to 20.1% over the same period in 2023. This continues the company's impressive five-year revenue CAGR of 17%. Net income is expected to land between $56.8 million and $60.9 million, translating to diluted earnings per share (EPS) of $0.33 to $0.36, with the stock currently trading at a P/E ratio of 19.9x.
The full-year outlook is similarly positive, with net revenue predicted to be nearly $5 billion, which would represent a 16.0% to 16.2% growth year-over-year. Net income for the year is projected to be between $208.5 million and $212.6 million, or $1.21 to $1.23 EPS. Adjusted net income and adjusted EPS are also expected to show increases, with adjusted net income estimated at $268.3 million to $274.1 million, or $1.55 to $1.59 adjusted EPS. Adjusted EBITDA is anticipated to be approximately $441.0 million to $444.0 million, a 3.7% to 4.4% increase from the previous year.
For the upcoming full year 2025, Option Care Health has set preliminary guidance for net revenue to reach between $5.2 billion and $5.4 billion, with adjusted EBITDA expected to be in the range of $445 million to $465 million, and adjusted EPS projected at $1.59 to $1.69. These figures include the anticipated negative impact of $60 million to $70 million due to Stelara pricing adjustments.
In addition to these financial projections, the company has announced the completion of a $90 million share repurchase under its previous program and the approval of a new $500 million stock repurchase program by the Board of Directors on January 10, 2025, without a specified expiration date. InvestingPro analysis reveals that management has been aggressively buying back shares, while maintaining a strong 7% free cash flow yield. According to InvestingPro's Fair Value model, the stock currently appears undervalued.
Option Care Health is also set to participate in the 43rd Annual J.P. Morgan Healthcare Conference today, with a presentation scheduled for 1:30 p.m. P.T. The company will release its full Q4 and full-year results on February 26, 2025, before the market opens and will host a conference call at 8:30 a.m. E.T. on the same day.
The information provided is based on a press release statement and is subject to the completion of the company's year-end close procedures and further financial review. For investors seeking deeper insights, InvestingPro offers a comprehensive research report on Option Care Health, along with additional ProTips and over 30 financial metrics to help make informed investment decisions. The company's independent registered public accounting firm has not audited or reviewed these preliminary estimates. The final results may differ from the current estimates and should not be considered a substitute for full financial statements prepared in accordance with GAAP.
In other recent news, Option Care Health has experienced several significant developments. The company reported a robust 17% increase in revenue during the third quarter due to organic growth initiatives, and an adjusted EBITDA of $115.6 million. The company also expects its 2024 revenue to fall between $4.9 billion and $4.95 billion. Despite supply chain disruptions, Option Care Health ended the quarter with a solid $483 million in cash.
Analysts, however, have expressed concerns about the company's future. UBS initiated coverage with a neutral rating, citing uncertainties that could impact the company's financial performance. Goldman Sachs downgraded the stock from Buy to Neutral due to potential pricing pressures on Stelara, a significant drug in Option Care Health's portfolio. Truist Securities, Deutsche Bank (ETR:DBKGn), Jefferies, and BofA Securities have also revised their outlooks on the company, with Truist Securities lowering its price target to $34, despite maintaining a Buy rating. Deutsche Bank reduced its price target from $36 to $30, while Jefferies and BofA Securities downgraded the company's stock, citing concerns about the pricing of Stelara.
In addition to these developments, Option Care Health is considering strategies for capital deployment, including share repurchases and potential mergers and acquisitions. However, the company faces challenges such as IV bag shortages and changes in drug pricing due to the Inflation Reduction Act, which are expected to impact financial results in 2025. These are recent developments that investors should consider when evaluating Option Care Health's performance and prospects.
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