Option Care Health to Participate in the TD Cowen Healthcare Conference

What Happened?

Shares of alternate site health provider Option Care Health jumped 8.9% in the afternoon session after the company announced it was doubling its share repurchase authorization to $1.0 billion and released its preliminary 2025 results. 

The board of directors approved the increase to the share repurchase program from $500 million. Option Care Health also provided preliminary unaudited results, with fourth-quarter 2025 net revenue expected between $1.46 billion and $1.47 billion. The company's guidance for 2026 called for net revenue of $5.8 billion to $6.0 billion, which fell slightly below some analyst estimates. Despite the mixed outlook, investor sentiment was buoyed by the significant buyback and positive analyst actions. Analysts at both Citizens and Morgan Stanley raised their price targets on the stock to $38.00, with Citizens reiterating a "Market Outperform" rating.

What Is The Market Telling Us

Option Care Health’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 5.8% on the news that its third-quarter earnings was overshadowed by a full-year outlook that failed to impress investors. 

The company reported adjusted earnings of $0.45 per share on $1.44 billion in revenue, topping Wall Street's estimates. However, the market appeared to focus on the company's full-year guidance. While management slightly raised its forecast, the new midpoint of $1.70 for adjusted earnings per share was just below the analyst consensus of $1.71. Additionally, the company's free cash flow margin of 9.1% represented a notable decrease from 11.8% in the same quarter last year. The market's negative reaction suggested that investors were hoping for a stronger outlook, and the mixed results, including the weaker cash flow, were not enough to sustain a positive trend.

Option Care Health is up 7.8% since the beginning of the year, and at $34.77 per share, it is trading close to its 52-week high of $35.20 from March 2025. Investors who bought $1,000 worth of Option Care Health’s shares 5 years ago would now be looking at an investment worth $2,072.