Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $31.83B
• Dividend Yield: 1.53%
• Average Volume (3M): 2.79M
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.44
• Revenue Growth: 2.85%
• EPS Growth: 110.82%
• Country: US
• Employees: 47,922
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Distribution
• EPS (TTM): 5.36
• Shares Outstanding: 241,568,000
• 10 Day Avg. Volume: 3,399,570
• 30 Day Avg. Volume: 2,787,258
• PEG Ratio: 0.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.14
• Price to Cash Flow (P/CF): -19.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $145.50
• Price Target Upside: 10.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Cardinal Health's stock score reflects strong revenue growth and positive future guidance, tempered by financial stress from negative equity and declining cash flow. Technical indicators suggest a stable trend, while valuation metrics indicate a slightly high price level. Acquisitions and strategic initiatives offer long-term potential, despite current challenges in specific segments.

Positive Factors

Acquisitions

The acquisition of ADS is expected to immediately contribute positively to earnings, providing an unrecognized lift to future performance.

Earnings Growth

There's an expectation for a 10-14% long-term EPS growth target, which is anticipated to be viewed positively by the market.

Negative Factors

Segment Performance

GMPD EBIT was lowered by approximately 11% primarily due to the WaveMark write-off.

Tariff Impact

Recent stock volatility is largely influenced by tariff headlines, which significantly impact the GMPD segment.

Cardinal Health Business Overview & Revenue Model

Company Description

Cardinal Health, Inc. operates as an integrated healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and offers medication therapy management and patient outcomes services to hospitals, other healthcare providers, and payers, as well as provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines. The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits. The company was incorporated in 1979 and is headquartered in Dublin, Ohio.

How the Company Makes Money

Cardinal Health generates revenue primarily through its Pharmaceutical and Medical segments. The Pharmaceutical segment, which accounts for the majority of the company's revenue, involves the distribution of branded and generic pharmaceuticals, specialty medicines, and over-the-counter healthcare and consumer products. The company earns money by purchasing these products at wholesale prices and distributing them to pharmacies, hospitals, and other healthcare providers, often under long-term contracts. The Medical segment focuses on the distribution of medical products, including surgical supplies, laboratory products, and other healthcare-related items. Revenue is generated through the sale of these products as well as through value-added services such as inventory management and logistics solutions. Cardinal Health also benefits from strategic partnerships and collaborations with healthcare manufacturers and providers, enabling it to offer a comprehensive portfolio of products and services to its customers.

Cardinal Health Financial Statement Overview

Summary

Cardinal Health exhibits strong revenue growth, with a 21% increase from 2022, and a stable gross profit margin. However, the balance sheet is stressed with negative stockholders' equity and high liabilities, and cash flow is declining, impacting liquidity and financial health.

Income Statement

Cardinal Health shows robust revenue growth with a TTM revenue of $222.3 billion, a 21% increase from 2022. The gross profit margin is stable at 3.39%, and the net profit margin improved to 0.59%. Although EBIT and EBITDA margins are modest at 1.01% and 1.10% respectively, the consistent revenue growth indicates strong market demand.

Balance Sheet

The balance sheet reveals challenges with negative stockholders' equity of $2.99 billion, resulting in an unfavorable debt-to-equity ratio. Despite a high total debt of $7.61 billion, the equity ratio is negative, indicating financial stress. The company's liabilities exceed assets, posing significant risk.

Cash Flow

Operating cash flow has turned negative in TTM, stressing liquidity. Free cash flow has declined significantly from $3.25 billion to -$513 million. The company faces challenges in converting its income into cash, impacting its ability to finance operations without external funding.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
222.32B	226.83B	205.01B	181.36B	162.47B	152.92B
	Gross Profit
7.54B	7.41B	6.89B	6.54B	6.78B	6.87B
	EBIT
2.25B	1.24B	727.00M	1.65B	1.84B	1.77B
	EBITDA
2.45B	1.98B	1.44B	126.00M	1.31B	-2.62B
	Net Income Common Stockholders
1.31B	852.00M	261.00M	-932.00M	611.00M	-3.69B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.64B	5.13B	4.04B	4.72B	3.41B	2.77B
	Total Assets
21.27B	45.12B	43.42B	43.88B	44.45B	40.77B
	Total Debt
2.11B	5.09B	4.70B	5.32B	6.24B	6.78B
	Net Debt
-530.60M	-41.00M	658.00M	598.00M	2.83B	4.00B
	Total Liabilities
15.91B	48.33B	46.27B	44.58B	42.66B	38.97B
	Stockholders Equity
5.36B	-3.21B	-2.85B	-706.00M	1.79B	1.79B
Cash Flow		Free Cash Flow
-513.00M	3.25B	2.36B	2.73B	2.03B	1.58B
	Operating Cash Flow
-19.00M	3.76B	2.84B	3.12B	2.43B	1.96B
	Investing Cash Flow
-2.75B	-1.85B	-454.00M	567.00M	-378.00M	493.00M
	Financing Cash Flow
1.96B	-847.00M	-3.05B	-2.46B	-1.32B	-2.20B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 131.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAH, the sentiment is Positive. The current price of 131.77 is below the 20-day moving average (MA) of 132.41, above the 50-day MA of 128.77, and above the 200-day MA of 115.59, indicating a neutral trend. The MACD of 2.69 indicates Negative momentum. The RSI at 72.63 is Negative, neither overbought nor oversold. The STOCH value of 82.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CAH.

Cardinal Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCK	77 Outperform	$85.14B	31.14	51.23%	0.40%	14.29%	-1.20%
CVS	76 Outperform	$87.07B	18.86	6.07%	3.83%	4.02%	-43.51%
HSIC	70 Outperform	$7.79B	21.12	11.07%	―	2.71%	-3.26%
WBA	62 Neutral	$9.24B	―	-56.13%	9.28%	5.08%	4.43%
CAH	61 Neutral	$31.83B	24.60	-43.80%	1.53%	2.85%	110.82%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
OMI	43 Neutral	$540.78M	―	-48.70%	―	3.55%	-757.75%

Cardinal Health Corporate Events

Cardinal Health Appoints New Independent Directors

On March 7, 2025, Cardinal Health’s Board of Directors elected Robert W. Musslewhite and Sudhakar Ramakrishna as independent directors. Musslewhite, with a background in healthcare analytics, and Ramakrishna, an expert in technology and cybersecurity, are expected to bring valuable insights to the board. This strategic move aims to enhance Cardinal Health’s capabilities in navigating complex business environments and driving innovation.

Cardinal Health Reports Mixed Q2 Results Amid Strategic Growth

Cardinal Health reported a 4% decrease in second-quarter fiscal year 2025 revenues to $55.3 billion, though revenue increased by 16% when excluding a significant customer contract expiration. The company also announced a 9% increase in non-GAAP operating earnings to $635 million and raised its fiscal year 2025 non-GAAP EPS guidance. The acquisition of a 73% stake in GI Alliance was completed, aligning with strategic growth in specialty sectors.

Cardinal Health Raises 2025 Earnings Forecast Expectations

Cardinal Health updated its non-GAAP diluted earnings per share expectations for fiscal year 2025, now anticipating results at the upper end of the $7.75 to $7.90 range. This adjustment is attributed to strong performance in the Pharmaceutical and Specialty Solutions segment, highlighting potential positive implications for stakeholders.