Key Takeaways
(New York) -- Option Care Health Inc. (NASDAQ: OPCH) shares plummeted approximately 26.4% after the company unexpectedly cut its full-year 2026 revenue forecast just 65 days after reaffirming it, prompting a law firm to launch an investigation into the company’s officers and directors.
The investigation by Levi & Korsinsky concerns whether Option Care Health made materially false or misleading statements regarding its financial outlook. "Investors who purchased OPCH stock or securities and suffered financial losses may be eligible," the law firm said in a statement, noting the stock's sharp decline after the revised guidance was announced on April 30, 2026.
On February 24, 2026, management had reiterated revenue guidance of $5.8 billion to $6 billion for the full year. However, on April 30, the company slashed that forecast by as much as 3.75% to a new range of $5.675 billion to $5.775 billion, citing lower patient retention and therapy mix. The updated guidance implies just 1% growth at the midpoint, a significant deceleration.
The stock's collapse has drawn mixed reactions, with some analysts defending the company while insiders increase their holdings. CEO John Charles Rademacher purchased 12,500 shares for $264,750 on May 4, and CFO Meenal Sethna acquired 16,225 shares for $326,933, signaling leadership's confidence despite the headwinds.
Despite the guidance cut, Option Care Health maintained its full-year adjusted EPS target of $1.82 to $1.92, representing an 8.7% annual increase at the midpoint. The company's first-quarter adjusted EPS of $0.40 beat the consensus estimate of $0.37, even as revenue of $1.35 billion missed expectations of $1.39 billion. Management attributed the first-quarter weakness to a larger-than-anticipated drop in patients for certain therapies and delays in insurance reauthorization.
Wall Street remains divided on the stock's prospects. Deutsche Bank reaffirmed a "buy" rating but lowered its price target to $26 from $40. TD Cowen took a more cautious stance, downgrading the stock to "hold" and cutting its price target to $23 from $37. According to MarketBeat, Option Care Health has a consensus "Moderate Buy" rating with an average price target of $32.08.
The sharp sell-off has pushed the stock down over 37% year-to-date, testing its 52-week low of $18.01. The insider purchases and maintained profitability guidance suggest management views the current challenges as temporary. Investors will be watching the company's second-quarter results for signs of a revenue re-acceleration and improved operating momentum.
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