Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $36.64B
• Dividend Yield: 1.32%
• Average Volume (3M): 2.16M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.47
• Revenue Growth: 0.78%
• EPS Growth: 183.45%
• Country: US
• Employees: 47,922
• Sector: Healthcare
• Sector Strength: 55
• Industry: Medical - Distribution
• EPS (TTM): 2.35
• Shares Outstanding: 238,677,000
• 10 Day Avg. Volume: 1,752,774
• 30 Day Avg. Volume: 2,163,612
• PEG Ratio: -0.73
• Price to Book (P/B): -8.66
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.47
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 0.03
• Enterprise Value/Gross Profit: 3.26
• Enterprise Value/Ebitda: 2.53
• 1Y Price Target: $171.42
• Price Target Upside: 6.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 70 Outperform
• Price Target: $169.00 ▲(5.28%Upside)

Cardinal Health's strong operational performance and strategic growth initiatives are offset by financial risks due to negative equity and high leverage. The stock's valuation is relatively high, and while technical indicators show stability, the company's ability to manage tariff impacts and maintain growth will be critical for future performance.

Positive Factors

Financial Performance

The MSO platform is now contributing approximately $3 billion in higher margin revenue to Cardinal Health.

Growth Outlook

The company has a strong execution and a multipronged growth outlook with particular potential upside from specialty and nuclear/other.

Negative Factors

Investor Concerns

Expectations are high heading into the event due to impressive execution over the past two years and multiple industry tailwinds.

Tariff Impact

Investors are questioning the impact of tariffs on the Medical segment, despite an improved backdrop.

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 makes money primarily through its two main segments: Pharmaceutical and Medical. The Pharmaceutical segment is the largest contributor to revenue, where the company earns money by distributing branded and generic pharmaceuticals, specialty pharmaceuticals, and over-the-counter healthcare products to a wide range of healthcare providers and pharmacies. The Medical segment generates revenue by distributing medical, surgical, and laboratory products, and by offering supply chain services to healthcare providers. Cardinal Health also benefits from strategic partnerships and contracts with healthcare providers and manufacturers, which enhance its distribution network and service offerings, contributing significantly to its overall earnings.

Cardinal Health Financial Statement Overview

Summary

Cardinal Health shows robust revenue growth and operational efficiency with improved profit margins. However, the negative equity position and high leverage present significant financial risks. Cash flow generation remains strong, though the recent decline in free cash flow growth is a concern.

Income Statement

Cardinal Health has demonstrated strong revenue growth, with a TTM revenue of $222.3 billion, up from $205 billion the previous year, a growth rate of approximately 8.4%. The gross profit margin stands at 3.5%, indicating stable profitability, while the net profit margin improved to 0.7%, reflecting enhanced cost control and operational efficiency. The EBIT and EBITDA margins are 1.1% and 1.3%, respectively, signaling healthy operating performance. Despite these strengths, the margins remain relatively low, suggesting room for profitability improvements.

Balance Sheet

The balance sheet shows a concerning negative stockholders' equity of -$2.95 billion, indicating long-term financial instability and a need for equity improvement. The debt-to-equity ratio is not directly calculable due to negative equity, highlighting leverage challenges. However, the company has maintained a sizable asset base of $49.9 billion. The equity ratio is also negative, reflecting a need for stronger equity capital. These factors suggest potential financial risk, although the asset base provides some stability.

Cash Flow

Cardinal Health's cash flow performance is moderately strong, with a TTM free cash flow of $2.44 billion, down from $3.25 billion the previous year, indicating a decline in free cash flow growth. The operating cash flow to net income ratio is approximately 1.89, suggesting efficient generation of cash relative to net income. The free cash flow to net income ratio is 1.56, indicating solid cash conversion. While cash flows remain positive, the decline in free cash flow growth rate warrants attention.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
222.29B	226.83B	205.01B	181.36B	162.47B	152.92B
	Gross Profit
7.78B	7.41B	6.89B	6.54B	6.78B	6.87B
	EBIT
2.38B	1.24B	727.00M	1.65B	1.84B	1.77B
	EBITDA
2.81B	1.98B	1.44B	126.00M	1.31B	-2.62B
	Net Income Common Stockholders
1.56B	852.00M	261.00M	-932.00M	611.00M	-3.69B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.33B	5.13B	4.04B	4.72B	3.41B	2.77B
	Total Assets
49.87B	45.12B	43.42B	43.88B	44.45B	40.77B
	Total Debt
7.68B	5.09B	4.70B	5.32B	6.24B	6.78B
	Net Debt
4.35B	-41.00M	658.00M	598.00M	2.83B	4.00B
	Total Liabilities
51.77B	48.33B	46.27B	44.58B	42.66B	38.97B
	Stockholders Equity
-2.95B	-3.21B	-2.85B	-706.00M	1.79B	1.79B
Cash Flow		Free Cash Flow
2.44B	3.25B	2.36B	2.73B	2.03B	1.58B
	Operating Cash Flow
2.95B	3.76B	2.84B	3.12B	2.43B	1.96B
	Investing Cash Flow
-3.80B	-1.85B	-454.00M	567.00M	-378.00M	493.00M
	Financing Cash Flow
425.00M	-847.00M	-3.05B	-2.46B	-1.32B	-2.20B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 160.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 160.52 is above the 20-day moving average (MA) of 154.20, above the 50-day MA of 145.09, and above the 200-day MA of 125.91, indicating a bullish trend. The MACD of 2.77 indicates Positive momentum. The RSI at 72.46 is Negative, neither overbought nor oversold. The STOCH value of 49.47 is Neutral, 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
COR	78 Outperform	$55.09B	32.99	161.58%	0.77%	12.18%	-5.92%
MCK	76 Outperform	$89.80B	27.90	51.23%	0.40%	16.22%	15.29%
HSIC	74 Outperform	$8.69B	22.11	11.78%	―	1.75%	8.76%
PBH	74 Outperform	$4.21B	19.87	12.30%	―	1.10%	2.65%
CAH	70 Outperform	$36.64B	23.98	-43.80%	1.32%	0.78%	183.45%
Sector *	54 Neutral	$5.38B	3.31	-45.11%	3.29%	16.82%	0.04%
OMI	48 Neutral	$601.42M	―	-49.91%	―	2.84%	-828.91%

Cardinal Health Corporate Events

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.

The most recent analyst rating on (CAH) stock is a Hold with a $104.00 price target. To see the full list of analyst forecasts on Cardinal Health stock, see the CAH Stock Forecast page.

Cardinal Health Reports Q3 2025 Earnings Growth

On May 1, 2025, Cardinal Health reported its third-quarter fiscal year 2025 results, showing flat revenue at $54.9 billion compared to the previous year. However, excluding the impact of a customer contract expiration, revenue increased by 19%. The company saw a 21% increase in non-GAAP operating earnings to $807 million, driven by profit growth across all segments, and raised its fiscal year 2025 non-GAAP EPS guidance. The Pharmaceutical and Specialty Solutions segment experienced a 14% profit increase, while the Global Medical Products and Distribution segment saw a 2% revenue rise, highlighting Cardinal Health’s strong operational execution and value creation.