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    Option Care Health (OPCH): Valuation Insights as Stelara Contract Talks Add Uncertainty Following Inflation Reduction Act Changes

    Simply Wall St·09/27/2025 22:02:10
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    Option Care Health (OPCH) has landed in the spotlight following complicated contract negotiations with Janssen for Stelara, one of its most important drugs. Thanks to a steep price cut mandated by the Inflation Reduction Act, the stakes for these talks have suddenly risen. With several sticking points still unresolved and the company signaling that there will be no further updates until early 2026, investors now face elevated uncertainty around a major driver of future profitability. All of this arrives amid a year of mixed momentum for the stock. Option Care Health has delivered strong revenue and net income growth over the past year. Shares have swung from double-digit gains earlier in 2025 to a notable decline in recent months, dropping 3% following the latest contract headlines. While the past 12 months show an overall slide, the five-year return remains positive, suggesting that long-term holders have still done well. Volatility has picked up alongside news flow, and the next few quarters could prove crucial. After all these ups and downs, it is fair to ask whether a bargain is now forming in Option Care Health or if the market is simply pricing in ongoing uncertainty instead of setting up future growth.

    Most Popular Narrative: 29.6% Undervalued

    According to the most widely followed narrative, Option Care Health is trading well below its estimated fair value. Analysts believe future earnings growth, expanding clinical capabilities, and margin improvements could materially increase the company's intrinsic worth.

    Investments in technology (AI, analytics, digital infrastructure) and clinical resource efficiency projects are supporting increased operating leverage and process automation. These efforts are improving net margins and cash flow generation.

    Strategic capital deployment through share repurchases, targeted M&A, and internal investments positions Option Care Health to further accelerate top-line growth and diversify earnings. This approach is driving long-term adjusted EPS and earnings expansion.

    The secret behind this bullish outlook comes down to powerful profit drivers. Analysts are banking on a combination of technology upgrades and management initiatives to fuel substantial margin growth. Want to know which financial assumption could send the valuation soaring? Find out exactly what sets these projections apart from the crowd.

    Result: Fair Value of $38.78 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, shifts toward lower-margin therapies or tougher contract negotiations with payers could challenge the current outlook and potentially disrupt Option Care Health’s projected growth.

    Find out about the key risks to this Option Care Health narrative.

    Another View: Our DCF Model

    Looking at the SWS DCF model, a very different picture emerges for Option Care Health. This approach suggests the company is trading well below its fair value. Could the market be missing something?

    Look into how the SWS DCF model arrives at its fair value.
    OPCH Discounted Cash Flow as at Sep 2025
    OPCH Discounted Cash Flow as at Sep 2025
    Stay updated when valuation signals shift by adding Option Care Health to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

    Build Your Own Option Care Health Narrative

    If these perspectives do not fit your view, you can dive into the data and shape your own take on Option Care Health. All it takes is just a few minutes. Do it your way

    A great starting point for your Option Care Health research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.