Cardinal Health (CAH) AI Stock Analysis

• Market Cap: $47.15B
• Dividend Yield: 1.02%
• Average Volume (3M): 2.38M
• Price to Earnings (P/E): 30.0
• Beta (1Y): 0.32
• Revenue Growth: 4.37%
• EPS Growth: 28.48%
• Country: US
• Employees: 47,922
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Distribution
• EPS (TTM): 2.55
• Shares Outstanding: 237,595,050
• 10 Day Avg. Volume: 2,454,679
• 30 Day Avg. Volume: 2,381,029
• 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: 0.89
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 4.90
• Enterprise Value/Ebitda: 12.91
• 1Y Price Target: $216.33
• Price Target Upside: 8.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 9.83
• Revenue Forecast (FY): $257.71B

• Rating: 66 Neutral
• Price Target: $215.00 ▲(7.99% Upside)

Cardinal Health's overall stock score is driven by strong earnings call performance and robust cash flow management. However, the high P/E ratio and financial leverage concerns weigh on the score. The technical indicators suggest a positive trend, but valuation metrics indicate potential overvaluation. Addressing financial stability and profitability challenges could enhance the stock's attractiveness.

Positive Factors

Revenue Growth

Strong revenue growth across all segments indicates robust market demand and effective strategic execution, supporting long-term business expansion.

Cash Flow Management

Strong cash flow generation enhances liquidity and financial flexibility, enabling investment in growth opportunities and shareholder returns.

Strategic Acquisition

The acquisition is expected to bolster Cardinal Health's market position and contribute to profit growth, enhancing competitive advantage.

Negative Factors

High Leverage

High leverage poses financial risks, potentially affecting stability and limiting the company's ability to invest in growth or weather downturns.

Profitability Challenges

Low profitability margins indicate challenges in cost management and pricing power, which may impact long-term earnings growth and competitiveness.

Interest Expense Increase

Rising interest expenses due to financing costs can strain profitability and cash flow, affecting financial health and investment capacity.

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

Cardinal Health shows strong revenue growth and robust cash flow performance, with a significant free cash flow growth rate. However, the company faces challenges with profitability and financial leverage, as indicated by a negative stockholders' equity and high debt-to-equity ratio.

Income Statement

Cardinal Health shows a solid revenue growth rate of 5.27% in the TTM, indicating a positive trajectory. The gross profit margin is stable at 3.67%, but the net profit margin is relatively low at 0.70%, suggesting limited profitability. The EBIT and EBITDA margins are modest, reflecting operational efficiency challenges. Overall, the income statement reflects growth but with room for improvement in profitability.

Balance Sheet

The balance sheet reveals a negative stockholders' equity, leading to a concerning debt-to-equity ratio of -3.31. This high leverage poses a risk to financial stability. The return on equity is negative, indicating inefficiencies in generating returns from equity. The equity ratio is also negative, highlighting the need for strengthening the financial position. Overall, the balance sheet suggests financial vulnerability.

Cash Flow

Cardinal Health demonstrates robust cash flow performance with a significant free cash flow growth rate of 140.65% in the TTM. The operating cash flow to net income ratio is healthy, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also solid at 77.18%, reflecting efficient cash utilization. Overall, the cash flow statement indicates strong liquidity and cash management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	234.31B	222.58B	226.83B	204.98B	181.33B	162.47B
Gross Profit	8.59B	8.17B	7.41B	6.89B	6.48B	6.78B
EBITDA	3.26B	3.11B	1.96B	1.44B	55.00M	1.29B
Net Income	1.59B	1.56B	852.00M	330.00M	-938.00M	611.00M
Balance Sheet
Total Assets	55.23B	53.12B	45.12B	43.35B	43.88B	44.45B
Cash, Cash Equivalents and Short-Term Investments	4.59B	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	57.96B	55.76B	48.33B	46.31B	44.58B	42.66B
Stockholders Equity	-2.88B	-2.78B	-3.21B	-2.96B	-709.00M	1.79B
Cash Flow
Free Cash Flow	4.45B	1.85B	3.25B	2.36B	2.73B	2.03B
Operating Cash Flow	5.02B	2.40B	3.76B	2.84B	3.12B	2.43B
Investing Cash Flow	-5.66B	-5.61B	-1.85B	-454.00M	567.00M	-378.00M
Financing Cash Flow	2.38B	1.95B	-847.00M	-3.05B	-2.46B	-1.32B

Cardinal Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 199.10
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 199.1 is below the 20-day moving average (MA) of 203.28, above the 50-day MA of 189.05, and above the 200-day MA of 158.60, indicating a neutral trend. The MACD of 1.31 indicates Positive momentum. The RSI at 52.29 is Neutral, neither overbought nor oversold. The STOCH value of 43.96 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
HSIC	74 Outperform	$9.02B	24.33	11.39%	―	3.51%	29.65%
COR	70 Neutral	$66.53B	43.08	144.31%	0.66%	9.31%	5.92%
CAH	66 Neutral	$47.15B	29.96	―	1.02%	4.37%	28.48%
PBH	66 Neutral	$3.00B	15.36	11.29%	―	-0.02%	-1.87%
MCK	62 Neutral	$99.55B	25.11	―	0.38%	17.23%	66.17%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
OMI	42 Neutral	$240.55M	-0.18	-184.47%	―	-37.09%	-2639.44%

Cardinal Health Corporate Events

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.

Cardinal Health Reports Strong Q1 2026 Revenue Growth

On October 30, 2025, Cardinal Health reported a 22% increase in first-quarter fiscal year 2026 revenues, reaching $64 billion. The company’s non-GAAP operating earnings rose 37% to $857 million, driven by growth across all five operating segments. The company raised its fiscal 2026 non-GAAP EPS guidance and adjusted free cash flow outlook, reflecting strong financial performance and strategic execution. Cardinal Health also announced the anticipated completion of its acquisition of Solaris Health in early November, which is expected to bolster its market position.

Cardinal Health Secures New $1 Billion Credit Agreement

On October 7, 2025, Cardinal Health entered into a new 364-Day Credit Agreement with Bank of America, allowing access to $1 billion of revolving credit until October 6, 2026. This agreement supports general corporate purposes and backs the company’s commercial paper program, with conditions including a financial covenant requiring a Consolidated Net Leverage Ratio of no greater than 3.75 to 1.00.

Cardinal Health Extends Receivables Agreement to 2028

On September 30, 2025, Cardinal Health Funding, LLC, a subsidiary of Griffin Capital, and several financial institutions including Wells Fargo and Bank of America, entered into a First Amendment to extend the term of their receivables purchase agreement to September 28, 2028. This amendment aims to maintain the company’s financial flexibility and strengthen its position by ensuring continued access to financing, which is crucial for its operations and relationships with stakeholders.