Option Care Health
Option Care Health
OPCH
7.67%
96%
- Breaks out from 31.18 cup base buy point, with 30.41 early entry
- Newly profit, sales growth accelerating
- Relative strength line hitting new highs for weeks
Industry Group Ranking
Emerging Pattern
Cup
A cup-shaped pattern with no handle. Must be at least six weeks long or as long as a year. Buy point is 10 cents above the left-side high.
Medical services provider Option Care Health (OPCH) is Friday's IBD Stock Of The Day as OPCH stock surged above multiple buy points.
XOption Care Health specializes in infusion therapy treatments for acute and chronic illnesses ranging from heart disease to neurological disorders. It's the largest independent provider of at-home or alternate-location services in the nation, with more than 225,000 patients and over 150 locations across the U.S. OPCH's services are available in all 50 states thanks to its network of pharmacies, partner hospitals and health care providers.
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Option Care Profitable
OPCH turned profitable in Q2 last year while sales growth has accelerated for the past two quarters. And its generating more cash from operations. OPCH recorded $32.7 million cash flow in Q1 to bring its total balance to $145.6 million.
"Despite a dynamic start to the year and ongoing pandemic disruption, the Option Care Health team executed exceptionally to ensure high quality patient care and solid financial results," CEO John Rademacher said in the earnings announcement. "Overall we expect 2022 to be a productive year as we continue to navigate a challenging environment and invest for future growth."
For 2022, Option Care expects revenue of $3.75 billion to $3.9 billion and cash flow from operations of "at least" $230 million.
Analysts see Option Care earnings growing 22% to 94 cents per share in 2022, with EPS up 24% in 2023.
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OPCH Stock Analysis
Option Care Health jumped 7.7% to 31.58 in heavy volume in Friday's stock market trading. OPCH stock cleared a cup base with a 31.18 buy point. However, it was already actionable earlier in the session as it raced past a not-quite handle, offering a 30.41 entry.
The relative strength line, the blue line in the chart provided, has been hitting new highs for several weeks. That reflects OPCH stock's strong outperformance vs. the S&P 500 index.
Option Care has an EPS Rating of 76, which is just shy of the CAN SLIM target of 80. But that should improve with time as the company has a longer track record of sustained, rising profits.
OPCH stock has a Composite Rating of 97 out of a possible 99, which combines a number of key technical indicators into one easy-to-read score.
Option Care Health stock recently joined the IBD 50 list.
Options Earnings Report Looms
Investors should be aware of the upcoming earnings report on July 27. Though expectations are positive, the market uptrend is under pressure and stocks require more scrutiny than in a bull market.
An earnings miss could put a kink in OPCH stock's breakout. So it's important for investors to remember strategies for when its time to take profits and cut losses.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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