Cencora (COR) AI Stock Analysis

• Market Cap: $56.75B
• Dividend Yield: 0.72%
• Average Volume (3M): 2.01M
• Price to Earnings (P/E): 41.6
• Beta (1Y): 0.14
• Revenue Growth: 11.64%
• EPS Growth: -23.54%
• Country: US
• Employees: 46,000
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Distribution
• EPS (TTM): 7.03
• Shares Outstanding: 193,917,080
• 10 Day Avg. Volume: 1,652,359
• 30 Day Avg. Volume: 2,009,570
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.93
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $302.45
• Price Target Upside: 4.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

Cencora's robust revenue growth and strategic acquisitions are significant strengths, offset by high leverage and recent cash flow challenges. While technical indicators show upward momentum, the stock's high valuation remains a consideration.

Positive Factors

Business Expansion

OneOncology significantly expanded its business, growing its provider base by 60%.

Financial Performance

The company's adjusted EPS beat estimates, showcasing strong financial performance.

Negative Factors

Customer Relationship Risks

There is uncertainty around the relationship with WBA, which is COR’s largest customer, as recent commentary sounded somewhat adversarial.

Valuation Concerns

Valuation feels relatively full compared to significant discounts across much of the rest of the coverage universe.

Cencora Business Overview & Revenue Model

Company Description

Cencora, Inc. sources and distributes pharmaceutical products. Its U.S. Healthcare Solutions segment distributes pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers. The company also provides pharmacy management, staffing, and other consulting services; supply management software to retail and institutional healthcare providers; packaging solutions to various institutional and retail healthcare providers; clinical trial support, product post-approval, and commercialization support services; data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers; and pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and other products to the companion animal and production animal markets. In addition, this segment distributes plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products; and provides other services primarily to physicians who specialize in various disease states, primarily oncology, as well as to other healthcare providers, including hospitals and dialysis clinics. The company's International Healthcare Solutions segment offers international pharmaceutical wholesale and related service, and global commercialization services; and distributes pharmaceuticals, other healthcare products, and related services to pharmacies, doctors, health centers and hospitals primarily in Europe. This segment also provides specialty transportation and logistics services for the biopharmaceutical industry. The company was formerly known as AmerisourceBergen Corporation and changed its name to Cencora, Inc. in August 2023. Cencora, Inc. was incorporated in 2001 and is headquartered in Conshohocken, Pennsylvania.

How the Company Makes Money

Cencora makes money primarily through its pharmaceutical distribution services, acting as a critical intermediary between drug manufacturers and healthcare providers, such as hospitals and pharmacies. The company purchases pharmaceuticals and medical products from manufacturers and distributes them to healthcare facilities, earning revenue from the markup on these products. Additionally, Cencora generates income through value-added services, such as supply chain management, consulting, and technology solutions that improve operational efficiencies for its clients. Significant partnerships with pharmaceutical companies and healthcare organizations contribute to its earnings by ensuring a steady flow of products and services. The company also benefits from economies of scale and an extensive logistics network, which enhance its competitive positioning and profitability.

Cencora Financial Statement Overview

Summary

Cencora shows strong revenue growth and stable profitability margins, but high leverage and recent negative cash flows pose financial stability risks.

Income Statement

Cencora demonstrates strong revenue growth with a consistent increase from $189.89 billion in 2020 to $303.19 billion in TTM 2024, indicating robust market demand. Gross profit and net profit margins have remained stable, with a recent gross profit margin of 3.1% and net profit margin of 0.46% as of TTM 2024, reflecting efficiency in operations. The EBIT and EBITDA margins show consistent performance around 0.8% and 0.96%, respectively, indicating healthy operational profitability. However, the slight decline in net income in TTM 2024 compared to previous periods suggests a need for careful monitoring of profitability.

Balance Sheet

The balance sheet reveals a concerning high leverage with a debt-to-equity ratio of 22.52 in TTM 2024, posing a potential risk to financial stability. While the company's total assets have grown to $69.05 billion, the stockholders' equity remains low at $361.9 million, limiting financial flexibility. The equity ratio is a mere 0.52%, indicating significant reliance on debt. Despite these risks, the company has managed to increase its total assets consistently, showing underlying business growth.

Cash Flow

Cencora's cash flow analysis shows a negative operating cash flow in TTM 2024, which is a point of concern. The free cash flow has also turned negative at -$638 million, contrasting with positive cash flows in previous years. The operating cash flow to net income ratio has dropped significantly, indicating potential cash-generation issues. Although the past years have shown positive free cash flow, the recent downturn suggests a need for improved cash flow management.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
293.96B	262.17B	238.59B	213.99B	189.89B
	Gross Profit
9.91B	8.96B	8.33B	6.77B	5.20B
	EBIT
2.18B	2.34B	2.37B	2.35B	-5.14B
	EBITDA
3.25B	3.41B	3.11B	2.91B	-4.75B
	Net Income Common Stockholders
1.51B	1.75B	1.70B	1.54B	-3.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.13B	2.59B	3.39B	2.55B	4.60B
	Total Assets
67.10B	62.56B	56.56B	57.34B	43.95B
	Total Debt
4.39B	4.79B	5.70B	6.68B	4.12B
	Net Debt
1.26B	2.20B	2.31B	4.14B	-478.23M
	Total Liabilities
66.31B	61.89B	56.49B	56.75B	44.79B
	Stockholders Equity
645.94M	666.29M	-289.78M	223.35M	-839.64M
Cash Flow		Free Cash Flow
3.00B	3.45B	2.21B	2.23B	1.84B
	Operating Cash Flow
3.48B	3.91B	2.70B	2.67B	2.21B
	Investing Cash Flow
-618.10M	-2.60B	-368.44M	-6.14B	-379.87M
	Financing Cash Flow
-2.33B	-2.22B	-1.75B	1.95B	-603.62M

Cencora Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 290.43
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COR, the sentiment is Positive. The current price of 290.43 is above the 20-day moving average (MA) of 283.79, above the 50-day MA of 269.71, and above the 200-day MA of 244.27, indicating a bullish trend. The MACD of 5.58 indicates Positive momentum. The RSI at 63.97 is Neutral, neither overbought nor oversold. The STOCH value of 92.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COR.

Cencora Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCK	77 Outperform	$88.58B	32.39	51.23%	0.39%	14.29%	-1.20%
CVS	76 Outperform	$87.75B	19.01	6.07%	3.99%	4.02%	-43.51%
CNC	74 Outperform	$31.68B	10.22	12.59%	―	8.85%	33.30%
COR	73 Outperform	$56.75B	41.64	245.32%	0.72%	11.64%	-23.54%
CAH	66 Neutral	$35.16B	27.17	-43.80%	1.43%	2.85%	110.82%
GSK	65 Neutral	$79.89B	24.69	19.11%	3.84%	6.28%	-47.11%
Sector *	52 Neutral	$5.28B	3.75	-42.72%	2.86%	17.70%	2.03%

Cencora Corporate Events

Cencora to Update 2025 Financial Guidance at Conference

On March 10, 2025, Cencora, Inc. executives will present at the Leerink Partners Global Healthcare Conference, where they will update their fiscal year 2025 financial guidance. The adjusted diluted earnings per share for fiscal 2025 is now projected to be between $15.30 and $15.60, reflecting positive momentum in their core U.S. Healthcare Solutions segment.

Cencora Reports Strong Q1 2025 Financial Performance

On February 5, 2025, Cencora reported a revenue increase of 12.8% year-over-year to $81.5 billion for the first quarter of fiscal 2025. The adjusted diluted earnings per share rose by 13.7% to $3.73. The company has raised its adjusted diluted EPS guidance range for fiscal 2025 and emphasized its strategic focus on specialty services following the acquisition of Retina Consultants of America. Despite a decrease in GAAP diluted EPS and operating income, Cencora highlighted its customer-centric approach and execution of its pharmaceutical strategy as key drivers for maintaining its market leadership.