Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $35.66B
• Dividend Yield: 1.36%
• Average Volume (3M): 2.44M
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.41
• Revenue Growth: -1.94%
• EPS Growth: 85.70%
• Country: US
• Employees: 47,922
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Distribution
• EPS (TTM): 2.08
• Shares Outstanding: 238,793,640
• 10 Day Avg. Volume: 2,492,822
• 30 Day Avg. Volume: 2,444,284
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 0.21
• Enterprise Value/Gross Profit: 5.62
• Enterprise Value/Ebitda: 14.79
• 1Y Price Target: $185.33
• Price Target Upside: 23.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 59 Neutral
• Price Target: $155.00 ▲(3.64% Upside)

Cardinal Health's overall stock score reflects a mix of strong revenue growth and strategic initiatives, balanced by significant financial challenges and a bearish technical outlook. The company's proactive approach to acquisitions and capital management is promising, but high leverage and valuation concerns weigh on the score.

Positive Factors

Operational Guidance

The company raised FY26 operational guidance just two months after the investor day, another sign of enterprise strength.

Pharma Growth

Cardinal's underlying Pharma business continues to perform well, with FY4Q'25 EBIT coming in ahead of the midpoint of guidance when adjusting for one-off expenses and still growing 13% in the quarter.

Negative Factors

Pharma Segment Miss

Concerns around the F4Q Pharma segment miss pressured the stock due to potential implications for future Pharma growth.

Unexpected Costs

Unexpected individually immaterial costs arose into FYE, weighing on segment AOI growth that otherwise would have been above the midpoint of previous guidance.

Cardinal Health Business Overview & Revenue Model

Company Description

Cardinal Health (CAH) is a global, integrated healthcare services and products company, specializing in the distribution of pharmaceuticals and medical products. Operating primarily in two segments, Pharmaceutical and Medical, Cardinal Health provides a wide range of services to healthcare providers, including hospitals, pharmacies, and other facilities. The company is known for its supply chain management services, as well as its manufacturing and distribution of medical and surgical products, including gloves, surgical kits, and other essential medical supplies.

How the Company Makes Money

Cardinal Health generates revenue primarily through two key segments: Pharmaceutical and Medical. In the Pharmaceutical segment, the company earns money by distributing branded and generic pharmaceuticals, as well as providing related services such as inventory management and pharmacy solutions to healthcare providers. The Medical segment generates revenue through the sale of medical products, surgical supplies, and equipment to hospitals and healthcare facilities. Additionally, Cardinal Health benefits from long-term contracts with various healthcare providers, which ensure a steady stream of income. Strategic partnerships with manufacturers and leveraging technology for supply chain efficiencies also contribute to its earnings. The company's ability to negotiate favorable pricing with suppliers and manage logistics effectively enhances its profitability.

Cardinal Health Financial Statement Overview

Summary

Cardinal Health shows strong revenue growth and improving operational margins, but faces significant challenges with its balance sheet due to high leverage and negative equity. Cash flow management needs attention, as declining free cash flow could impact liquidity. Strategic initiatives to strengthen the balance sheet and enhance cash flow generation are crucial for long-term financial health.

Income Statement

Cardinal Health has demonstrated strong revenue growth with a 13.1% increase in the latest year, reflecting robust demand in the medical distribution sector. The gross profit margin has improved slightly to 3.67%, indicating better cost management. However, the net profit margin remains low at 0.70%, suggesting challenges in translating revenue growth into net income. The EBIT and EBITDA margins have shown improvement, but remain modest, highlighting potential areas for operational efficiency gains.

Balance Sheet

The balance sheet reveals a concerning negative stockholders' equity, resulting in a high debt-to-equity ratio of -3.07. This indicates significant leverage and potential financial risk. The return on equity is negative, reflecting the challenges in generating returns for shareholders. The equity ratio is also negative, suggesting a weak capital structure. These factors highlight the need for strategic financial restructuring to improve stability.

Cash Flow

Operating cash flow remains positive, but the free cash flow has declined by 24.1%, indicating potential cash management issues. The operating cash flow to net income ratio is low at 0.06, suggesting limited cash generation relative to net income. The free cash flow to net income ratio is healthier at 0.77, but the decline in free cash flow growth raises concerns about future liquidity.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	222.58B	222.58B	226.83B	204.98B	181.33B	162.47B
Gross Profit	8.17B	8.17B	7.41B	6.89B	6.48B	6.78B
EBITDA	3.11B	3.11B	1.96B	1.44B	55.00M	1.29B
Net Income	1.56B	1.56B	852.00M	330.00M	-938.00M	611.00M
Balance Sheet
Total Assets	53.12B	53.12B	45.12B	43.35B	43.88B	44.45B
Cash, Cash Equivalents and Short-Term Investments	3.87B	3.87B	5.13B	4.08B	4.72B	3.41B
Total Debt	8.53B	8.53B	5.09B	4.70B	5.32B	6.24B
Total Liabilities	55.76B	55.76B	48.33B	46.31B	44.58B	42.66B
Stockholders Equity	-2.78B	-2.78B	-3.21B	-2.96B	-709.00M	1.79B
Cash Flow
Free Cash Flow	1.85B	1.85B	3.25B	2.36B	2.73B	2.03B
Operating Cash Flow	2.40B	2.40B	3.76B	2.84B	3.12B	2.43B
Investing Cash Flow	-5.61B	-5.61B	-1.85B	-454.00M	567.00M	-378.00M
Financing Cash Flow	1.95B	1.95B	-847.00M	-3.05B	-2.46B	-1.32B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 149.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAH, the sentiment is Negative. The current price of 149.56 is below the 20-day moving average (MA) of 150.04, below the 50-day MA of 156.24, and above the 200-day MA of 138.81, indicating a neutral trend. The MACD of -1.75 indicates Negative momentum. The RSI at 44.85 is Neutral, neither overbought nor oversold. The STOCH value of 58.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAH.

Cardinal Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSIC	69 Neutral	$8.22B	21.80	11.18%	―	2.29%	14.98%
MCK	66 Neutral	$86.01B	27.57	51.23%	0.43%	20.35%	11.96%
PBH	65 Neutral	$3.29B	15.66	12.05%	―	0.63%	4.23%
COR	60 Neutral	$57.16B	30.33	130.60%	0.75%	11.56%	5.31%
CAH	59 Neutral	$35.66B	23.34	-43.80%	1.36%	-1.94%	85.70%
Sector *	51 Neutral	$7.92B	-0.43	-41.69%	2.21%	22.29%	-1.85%
OMI	43 Neutral	$417.12M	―	-144.11%	―	-17.10%	-2720.40%

Cardinal Health Corporate Events

Cardinal Health Completes $1 Billion Notes Offering

On August 27, 2025, Cardinal Health completed a public offering of $1 billion in notes, with proceeds intended to fund part of its proposed acquisition of Solaris Health. If the acquisition is not completed by August 12, 2026, or if Cardinal Health decides not to pursue it, the company will be required to redeem the notes at a premium.

Cardinal Health Secures $1 Billion in Notes Sale

On August 13, 2025, Cardinal Health entered into an underwriting agreement with major financial institutions for the sale of $1 billion in notes, consisting of $600 million in 4.500% Notes due 2030 and $400 million in 5.150% Notes due 2035. This financial maneuver is part of Cardinal Health’s strategy to optimize its capital structure, potentially impacting its market positioning and offering implications for investors and stakeholders in terms of financial stability and growth prospects.

Cardinal Health Reports Q4 2025 Financial Results

On August 12, 2025, Cardinal Health announced its fourth quarter and fiscal year 2025 financial results, reporting a relatively flat revenue of $60.2 billion for the fourth quarter. However, excluding the impact of a contract expiration, revenue increased by 21%. The company also reported a significant increase in non-GAAP operating earnings and EPS, driven by strong performance across its segments. Additionally, Cardinal Health raised its fiscal year 2026 non-GAAP EPS guidance and announced the acquisition of Solaris Health, a leading urology management services organization, indicating strategic growth and expansion in its specialty solutions segment.

Cardinal Health Updates FY25 Outlook and FY26 Guidance

On June 12, 2025, Cardinal Health announced updates to its fiscal year 2025 outlook and preliminary guidance for 2026, highlighting strategic initiatives and financial targets at its Investor Day. The company raised its non-GAAP diluted EPS guidance for FY25 and set preliminary FY26 guidance, emphasizing growth in Pharmaceutical and Specialty Solutions and other segments. Cardinal Health is investing in its Specialty Alliance MSO platform and expanding its Biopharma Solutions, while also enhancing its pharmaceutical distribution network with new facilities and technologies. The company aims to achieve sustainable long-term growth and value creation, with expectations of significant cash flow and share repurchases.