Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $53.17B
• Dividend Yield: 0.98%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 32.5
• Beta (1Y): 0.35
• Revenue Growth: 4.37%
• EPS Growth: 28.48%
• Country: US
• Employees: 47,922
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Distribution
• EPS (TTM): 2.63
• Shares Outstanding: 235,316,010
• 10 Day Avg. Volume: 1,265,444
• 30 Day Avg. Volume: 1,603,142
• PEG Ratio: 0.30
• Price to Book (P/B): -14.56
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 21.89
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 6.80
• Enterprise Value/Ebitda: 18.63
• 1Y Price Target: $249.92
• Price Target Upside: 10.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 10.27
• Revenue Forecast (FY): $258.60B

• Rating: 73 Outperform
• Price Target: $253.00 ▲(11.39% Upside)
• Action: Upgraded Date: 02/06/26
• Date: Action: Upgraded 02/06/26

The score is driven primarily by strong technical momentum and a very positive earnings update with raised FY26 EPS guidance and broad-based profit growth. Financial performance is supported by large and growing free cash flow, but weighed down by balance-sheet risk (negative equity and meaningful debt). Valuation is a secondary headwind due to the higher P/E and low dividend yield.

Positive Factors

Strong Free Cash Flow

Large, recurring free cash flow (TTM $5.5B) provides durable capacity to service debt, fund capex, fund acquisitions and sustain buybacks/dividends. In a distribution model where working capital swings occur, strong FCF materially improves financial optionality over the medium term.

Diversified Specialty & Pharma Scale

A large, growing Pharmaceutical & Specialty franchise (specialty revenues targeting >$50B) plus MSO platform and specialty wins diversify revenue beyond commoditized distribution. Scale in specialty distribution and patient-support services creates durable higher-growth, higher-margin runoff versus pure generic distribution.

Operational Improvements & Service Levels

Sustained investments in tech, e‑commerce and footprint have materially improved service levels and operational efficiency. Improved fulfilment and margin-enabling efficiency are structural advantages in distribution, supporting margin sustainability and customer retention over the medium term.

Negative Factors

Elevated Leverage and Negative Equity

High absolute debt ($9B) combined with negative shareholders' equity (~-$2.9B) constrains financial flexibility and raises refinancing and covenant risk if operating results weaken. Negative equity also reduces traditional leverage metrics' interpretability and limits balance-sheet resilience in downturns.

Very Thin Profit Margins

Reported net margins (~0.7%) and EBITDA (~1.3%) leave earnings highly sensitive to modest cost increases or revenue pressure. In a low-margin distribution model, adverse tariff effects, SG&A increases or payment/price timing shifts can materially compress reported profits and free-cash-flow conversion.

Revenue Sensitivity to Pricing & Policy

Structural pricing reforms (e.g., Medicare Drug Price Negotiation/IRA) and manufacturer list-price declines create persistent top-line pressure for distributors. While contractual protections may blunt margin erosion, ongoing WAC reductions and tariff headwinds present lasting revenue and visibility risks for a distribution-dependent model.

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 through multiple key streams, primarily from its Pharmaceutical and Medical segments. The Pharmaceutical segment earns revenue by distributing branded and generic pharmaceutical products to healthcare providers and pharmacies, including specialty pharmaceuticals and biosimilars. The Medical segment generates income by supplying medical and surgical products, including surgical instruments, diagnostic equipment, and consumables. Additionally, Cardinal Health has strategic partnerships with manufacturers and healthcare organizations, which enhance its distribution capabilities and expand its product offerings. The company also benefits from value-added services such as inventory management solutions and pharmacy management services, further contributing to its revenue model. Factors including market demand for healthcare products, operational efficiencies, and innovations in supply chain management play significant roles in driving Cardinal Health's earnings.

Cardinal Health Financial Statement Overview

Summary

Operating performance is improving with TTM revenue up 4.3% and strong profitability recovery versus FY2022–FY2023, plus very strong cash generation (TTM operating cash flow $6.1B; free cash flow $5.5B, +23.7%). The main offset is balance-sheet risk: elevated debt ($9.0B) and negative shareholders’ equity (~-$2.9B) reduce financial flexibility despite the cash flow strength.

Income Statement

TTM (Trailing-Twelve-Months) revenue rose 4.3% to $244.5B, showing steady top-line momentum after a slight decline in FY2025. Profitability has improved meaningfully versus FY2022–FY2023, with TTM net income at $1.7B and margins trending higher than prior years, but overall margins remain very thin (TTM net margin ~0.7% and EBITDA margin ~1.3%), leaving results more sensitive to cost pressure and execution.

Balance Sheet

Leverage is elevated with $9.0B of total debt in TTM, and the balance sheet is pressured by negative shareholders’ equity (about -$2.9B), which weakens financial flexibility and makes equity-based leverage and return measures less meaningful/less supportive. While total assets are sizable ($58.1B TTM), the negative equity position is a key risk factor if operating conditions tighten or working-capital needs rise.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow was $6.1B and free cash flow was $5.5B, with strong free-cash-flow growth (+23.7%). Free cash flow is large relative to reported earnings (about 90% of net income), supporting debt service and capital returns, though cash flow can still be exposed to working-capital swings inherent in distribution models.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	244.49B	222.58B	226.83B	204.98B	181.33B	162.47B
Gross Profit	8.86B	8.17B	7.41B	6.89B	6.48B	6.78B
EBITDA	3.23B	3.11B	1.96B	1.44B	55.00M	1.29B
Net Income	1.67B	1.56B	852.00M	330.00M	-938.00M	611.00M
Balance Sheet
Total Assets	58.08B	53.12B	45.12B	43.35B	43.88B	44.45B
Cash, Cash Equivalents and Short-Term Investments	2.78B	3.87B	5.13B	4.08B	4.72B	3.41B
Total Debt	9.03B	9.35B	5.61B	5.18B	5.80B	6.71B
Total Liabilities	60.78B	55.76B	48.33B	46.31B	44.58B	42.66B
Stockholders Equity	-2.70B	-2.78B	-3.21B	-2.96B	-709.00M	1.79B
Cash Flow
Free Cash Flow	5.51B	1.85B	3.25B	2.36B	2.73B	2.03B
Operating Cash Flow	6.10B	2.40B	3.76B	2.84B	3.12B	2.43B
Investing Cash Flow	-6.66B	-5.61B	-1.85B	-454.00M	567.00M	-378.00M
Financing Cash Flow	-468.00M	1.95B	-847.00M	-3.05B	-2.46B	-1.32B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 227.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 227.13 is above the 20-day moving average (MA) of 221.57, above the 50-day MA of 212.44, and above the 200-day MA of 176.59, indicating a bullish trend. The MACD of 4.11 indicates Negative momentum. The RSI at 60.08 is Neutral, neither overbought nor oversold. The STOCH value of 80.66 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	74 Outperform	$117.26B	27.54	―	0.37%	17.23%	66.17%
CAH	73 Outperform	$53.17B	32.52	―	0.98%	4.37%	28.48%
PBH	73 Outperform	$3.26B	18.35	11.29%	―	-0.02%	-1.87%
COR	66 Neutral	$70.88B	43.83	152.25%	0.66%	9.31%	5.92%
HSIC	65 Neutral	$9.81B	25.05	11.39%	―	3.51%	29.65%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Cardinal Health Corporate Events

Cardinal Health posts strong Q2 results, raises guidance

On February 5, 2026, Cardinal Health reported strong second-quarter fiscal 2026 results, with revenue rising 19% year over year to $65.6 billion, GAAP operating earnings up 29% to $707 million and non-GAAP operating earnings up 38% to $877 million, driving a 36% increase in non-GAAP diluted EPS to $2.63. The Pharmaceutical and Specialty Solutions segment remained the main growth engine, with revenue up 19% to $60.7 billion and segment profit up 29% to $687 million, supported by brand and specialty drug sales, acquisitions of MSO platforms and positive generics performance, while the Global Medical Products and Distribution segment delivered 3% revenue growth to $3.3 billion and a 106% jump in profit to $37 million on customer volume growth and cost optimization efforts. Reflecting this broad-based profit expansion and a lower share count, the company raised its fiscal 2026 non-GAAP EPS guidance to $10.15–$10.35, completed a $750 million baseline share repurchase and reached its targeted leverage range, signaling increased financial flexibility and confidence in ongoing operational momentum.

The most recent analyst rating on (CAH) stock is a Buy with a $245.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health Raises 2026 EPS Outlook, Highlights Growth

On January 13, 2026, Cardinal Health raised its fiscal 2026 non-GAAP diluted earnings per share outlook to at least $10.00, up from a prior range of $9.65 to $9.85, citing strong performance across its five operating segments and signaling continued operational momentum ahead of a detailed update on February 5. The company also projected that its Specialty revenues would exceed $50 billion in fiscal 2026, reflecting a three-year compounded annual growth rate of 16%, underpinned by robust demand in specialty distribution, expansion of its management services organization platforms and more than 30% anticipated revenue growth in BioPharma Solutions, including major new patient-support hub wins such as Sanofi and Regeneron’s Dupixent My Way program. In addition, Cardinal Health reported it had successfully transitioned manufacturer distribution service agreements for all branded drugs affected by the 2026 Medicare Drug Price Negotiation Program before the January 1 implementation, aiming to preserve compensation for its distribution role, and launched the ContinuCare Pathway program within its at-Home Solutions business to streamline medical-benefit diabetes supply delivery through a pharmacy-to-supplier referral model, already adopted by Publix’s nearly 1,400 pharmacies and expanding the program’s reach to more than 11,000 retail and grocery pharmacies. These moves, highlighted during the 44th Annual J.P. Morgan Healthcare Conference on January 13, 2026, underscore Cardinal Health’s efforts to strengthen its specialty and direct-to-patient platforms while adapting early to U.S. drug pricing reforms, with implications for earnings visibility and competitive positioning across its healthcare distribution and services portfolio.

The most recent analyst rating on (CAH) stock is a Buy with a $244.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health Elects Board, Approves Executive Compensation

At its 2025 Annual Meeting of Shareholders on November 5, Cardinal Health elected 12 directors to its Board, approved executive compensation, and ratified Ernst & Young LLP as its auditor for the fiscal year ending June 30, 2026. These decisions reflect shareholder support for the company’s leadership and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (CAH) stock is a Buy with a $225.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.