Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 9.9 |
| EV/EBITDA | 5.1 |
| Fwd P/E | 9.2 |
| PEG | 6.3 |
| Analyst target | 6.0 |
- ▸Forward P/E: 10.7x
- ▸PEG: 1.18
- ▸Attractively valued
OPCH · Why this verdict
Why Option Care Health (OPCH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With a forward price-to-earnings of 10.4x and a PEG ratio of 1.19, the stock trades at a meaningful discount relative to its earnings growth trajectory. Valuation breakdown | The forward price-to-earnings remains below 14x and earnings estimates stabilize or rise over the next 12 months. | →Stable |
| CounterLow valuations in healthcare services often reflect structural margin pressure from payer mix shifts rather than temporary mispricing. | ||
Managed care organizations and non-governmental payers account for 88% of revenue, concentrating the business in a small number of payer relationships that could reprice or terminate contracts. Bear case | Revenue from any single payer relationship does not exceed 40% of total revenue within the next 12 months. | →Stable |
| CounterDeep integration with large managed care organizations creates switching costs that reduce the probability of abrupt contract losses. | ||
Earnings estimates are trending downward, signaling that consensus expectations for future profitability are being revised lower, which typically precedes price underperformance. Bear case | Earnings estimate revisions turn positive with at least 2 consecutive upward revisions to forward estimates within 12 months. | →Stable |
| CounterThe company has beaten or matched estimates in all 4 recent quarters with a 3.6% average positive surprise, suggesting the downward revisions may be conservative. | ||
Despite the overall downtrend, the MACD is improving and on-balance volume is rising, suggesting that momentum may be transitioning toward recovery. Momentum breakdown | Price crosses above the 200-day moving average and sustains that level for at least 30 days within 12 months. | →Stable |
| CounterThe moving average slope is declining at 4.0% over 30 days, which is a steep confirmed downtrend that can persist for many months. | ||
With a forward price-to-earnings of 10.4x and a PEG ratio of 1.19, the stock trades at a meaningful discount relative to its earnings growth trajectory.
→StableValuation breakdown
- Expectation
- The forward price-to-earnings remains below 14x and earnings estimates stabilize or rise over the next 12 months.
CounterLow valuations in healthcare services often reflect structural margin pressure from payer mix shifts rather than temporary mispricing.
Managed care organizations and non-governmental payers account for 88% of revenue, concentrating the business in a small number of payer relationships that could reprice or terminate contracts.
→StableBear case
- Expectation
- Revenue from any single payer relationship does not exceed 40% of total revenue within the next 12 months.
CounterDeep integration with large managed care organizations creates switching costs that reduce the probability of abrupt contract losses.
Earnings estimates are trending downward, signaling that consensus expectations for future profitability are being revised lower, which typically precedes price underperformance.
→StableBear case
- Expectation
- Earnings estimate revisions turn positive with at least 2 consecutive upward revisions to forward estimates within 12 months.
CounterThe company has beaten or matched estimates in all 4 recent quarters with a 3.6% average positive surprise, suggesting the downward revisions may be conservative.
Despite the overall downtrend, the MACD is improving and on-balance volume is rising, suggesting that momentum may be transitioning toward recovery.
→StableMomentum breakdown
- Expectation
- Price crosses above the 200-day moving average and sustains that level for at least 30 days within 12 months.
CounterThe moving average slope is declining at 4.0% over 30 days, which is a steep confirmed downtrend that can persist for many months.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Option Care Health offers attractive valuation and consistent earnings execution, but heavy customer and supplier concentration alongside declining earnings estimates and a confirmed downtrend keep the risk profile elevated.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.1 |
| ROA | 4.1 |
| Gross margin | 0.0 |
| Op margin | 2.1 |
| Net margin | 1.8 |
| Current ratio | 5.9 |
| FCF quality | 6.1 |
| Moat | 4.2 |
| Piotroski F | 7.8 |
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.8 |
| EPS growth | 2.7 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 7.8 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 1.2 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.7%/30d — confirmed downtrend
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.6 |
| erm sentiment | 4.0 |
- ▸Analyst upside: 31%
Insider
6.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 8.0 |
| holder change | 5.1 |
- ▸Modest insider buying — $1,875,225 (0.055% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 4.8 |
| growth rank | 1.4 |
Technical
2.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.3 |
| support resistance | 2.5 |
| 52w position | 1.9 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.7 |
| days to cover | 6.8 |
| volatility | 4.1 |
| put call | 10.0 |
| implied vol | 3.5 |
| beta | 9.1 |
| debt equity | 5.4 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.3 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.46
Upside
+13.6%
Downside
9.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 61
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -40% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.0<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.46 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.3, Insider at 6.5, and Risk (lower is worse) at 6.2; the weakest are Technical at 2.2, Growth at 2.8, and Peer rank at 3.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Entry
Trip ifForward price-to-earnings rises above 14x due to earnings estimate cuts below current levels.
- P2Customer Concentration Risk
Trip ifRevenue from managed care payers exceeds 95% of total revenue for any reported period.
- P3Earnings Estimates Declining
Trip ifConsensus forward earnings estimates decline by more than 15% from current levels.
- P4Technical Recovery Setup
Trip ifPrice drops below $19 (below current stop-loss of $19.81) confirming trend continuation.