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Option Care (OPCH) Moves 5.2% Higher: Will This Strength Last?

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Option Care (OPCH - Free Report) shares soared 5.2% in the last trading session to close at $31.87. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.7% gain over the past four weeks.

Option Care recorded a strong price increase after it announced that it has terminated its previously-announced agreement to combine with Amedisys. Option Care Health will receive a $106 million termination fee as part of the mutual termination agreement, which will be incorporated into its established capital allocation strategy. Anticipated better-than-expected second-quarter 2023 revenues and earnings per share with the latest Zacks Consensus Estimate showing significant upward revision for the metrices compared to the year-ago reported numbers raise optimism about the stock. The company is expected to release its second-quarter earnings on Jul 26, 2023.

This infusion and home care services company is expected to post quarterly earnings of $0.22 per share in its upcoming report, which represents a year-over-year change of +15.8%. Revenues are expected to be $1.06 billion, up 8.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Option Care, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on OPCH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Option Care is a member of the Zacks Medical - Outpatient and Home Healthcare industry. One other stock in the same industry, LifeStance Health Group (LFST - Free Report) , finished the last trading session 0.3% lower at $8.96. LFST has returned 13.8% over the past month.

LifeStance Health's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.09. Compared to the company's year-ago EPS, this represents a change of +52.6%. LifeStance Health currently boasts a Zacks Rank of #3 (Hold).


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