Cardinal Health, Inc. (CAH)
UndervaluedFundamental
75
Price
$249.57
Market Cap
$58.83B
Part 1 · What the company is worth
Overview
Cardinal Health buys drugs and medical supplies in bulk from manufacturers and delivers them to pharmacies, hospitals and clinics across the United States, usually within a day of the order. It does not make the products it moves — it is the logistics layer between drugmakers and the point of care, operating warehouses, delivery fleets and ordering systems at a scale few competitors can match. A smaller unit also distributes medical devices and other health products directly to providers.
How it makes money
Revenue is booked when a shipment reaches the customer, and pharmaceutical distribution runs on razor-thin margins — the company makes its money on enormous volume rather than markup per unit, plus fees for services like inventory management. A specialty pharmaceuticals business, which handles higher-value drugs requiring cold chains or special handling, carries a better margin and has become the main source of profit growth.
Revenue by segment
Bulk distribution of branded and generic drugs, plus specialty pharmaceuticals, to pharmacies, hospitals and physician practices.
Distribution and, in part, manufacture of medical, surgical and laboratory products used in hospitals and clinics.
Nuclear pharmacy and precision health services, freight logistics for healthcare shippers, and home-based care supplies.
Competitive moat
Scale · NarrowPharmaceutical distribution in the U.S. is effectively a three-company business alongside McKesson and Cencora, because building the warehouse network, delivery infrastructure and DEA-licensed handling capability needed to serve pharmacies nationwide requires scale that new entrants cannot easily match. The advantage is narrow: the three distributors compete hard for the same hospital and pharmacy chains, keeping margins thin.
What drives demand
DefensivePeople need prescription drugs and medical supplies regardless of the state of the economy, which makes distribution volume one of the steadiest revenue streams in retail-adjacent business. The main swings come not from the economic cycle but from drug pricing changes, new generic launches, and one-off customer contract gains or losses.
Key risks
- Opioid litigation liabilities — Cardinal Health remains a defendant in opioid-distribution lawsuits and is paying out under a national settlement agreement — roughly $6.3 billion committed over 18 years — with continuing annual payments through 2038.
- Controlled-substance regulation — As a distributor of controlled substances, the company must hold valid DEA registrations and meet strict security and monitoring standards; a licensing suspension or compliance failure at any facility can halt shipments and trigger penalties.
- Customer concentration — A small number of large customers, led by CVS Health, generate a disproportionate share of revenue; losing one or seeing it shift volume to a competitor would have an outsized effect on results.
- Thin and pressured margins — The company operates in a highly competitive market where customers and suppliers continually push for better pricing; if it cannot offset these pressures through cost control or higher-margin services, profitability suffers.
Customer concentration
Top customers account for 43% of revenue
CVS Health alone accounted for 28% of fiscal 2026 revenue, and the five largest customers together made up 43%. Losing or renegotiating a single one of these relationships would move the company's results materially.
The case for
Buyers argue that fiscal 2026's 14% revenue growth and 30% jump in non-GAAP operating earnings show the specialty pharmaceuticals and GMPD businesses are finally offsetting the low-margin core, and that a nearly closed opioid settlement removes years of legal overhang.
The case against
Sellers worry that a business this dependent on CVS Health and a handful of other giants has little pricing power of its own, that generic drug price deflation keeps squeezing the core distribution margin, and that new tariffs on imported generics could hit supply and cost at the same time.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated with artificial intelligence on September 18, 2026, shared with all users
The other national full-line pharmaceutical wholesaler Cardinal Health names in its own filings, bidding for the same hospital systems, retail pharmacy chains and specialty physician practices in the United States.
The third of the three national drug wholesalers that together move over 90% of US pharmaceutical volume, competing with Cardinal Health on distribution contracts and specialty drug services.
Distributes medical and dental supplies to office-based physicians, clinics and ambulatory centres, the same non-acute customer base Cardinal Health's medical segment targets.
Named by Cardinal Health as a competitor of its medical products business: both manufacture and distribute surgical supplies and procedural kits to the same hospitals and surgery centers.
A national medical-surgical distributor named in Cardinal Health's filings, serving the same hospital supply chains and, like Cardinal, also selling home-healthcare products.
A privately held regional pharmaceutical wholesaler in the US South that Cardinal Health names in its filings, taking independent pharmacy and regional hospital accounts from the national distributors.
Balance Sheet & Liquidity
Revenue
$244.67B
Trailing 12 months (through 12/31/2025)
Net Income
$1.66B
Trailing 12 months (through 12/31/2025)
Free Cash Flow
$4.53B
Total Equity
$-2.88B
Total Liabilities
$60.02B
Current Ratio
0.91
Interest Coverage
8.02
Debt/EBITDA
2.79
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$669.09
Current Price
$249.57
Margin of Safety
+62.7%
Fair Value Range
$434.91 - $903.27
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
35.91
ROE
-59.5%
P/B Ratio
-
P/FCF
10.55
Gross Margin
3.7%
ROIC
13.6%
Profitability Radar
Value Creation (Economic Moat)
ROIC
13.6%
WACC
7.2%
ROIC − WACC
+6.3 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (18)
- EPS shows upward trend
- Price CAGR 11.89%
- ROIC 13.5%
- P/FCF 10.55
- Positive free cash flow
- CapEx intensity
- Current ratio
- Interest coverage
- Debt/EBITDA
- Return on tangible assets
- ROE 37.2%
- Revenue growth 5Y 9.4%
- Earnings surprise, average 11.1%
- PEG ratio 1.21
- Earnings quality (operating cash flow / net income) 3.67
- Share dilution -2.0%
- Net margin trend 0.7% vs 0.6%
- Piotroski F-Score 8/9
Failed (5)
- EPS CAGR 4.95%
- Gross margin 3.7%
- Operating margin 1.0%
- Low reliance on intangibles
- DCF valuation (Overvalued)
Unavailable (4)
- P/B ratio –
- Dividend payout –
- Debt/equity ratio
- Price below Graham Number
Piotroski F-Score
Strong financial health
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Jason M. Hollar | CEO & Director | 52 |
| Ms. Jessica L. Mayer | Chief Legal & Compliance Officer | 55 |
| Mr. Stephen M. Mason | Chief Executive Officer of GMPD segment | 53 |
| Ms. Deborah L. Weitzman | Chief Executive Officer of Pharmaceutical & Specialty Solutions Segment | 60 |
| Ms. Mary C. Scherer | Senior VP & Chief Accounting Officer | - |
| Mr. David Frost | Vice President of Investor Relations | - |
| Mr. Craig Cowman | President of Biopharma Solutions & Strategic Sourcing | - |
| Mr. Ben Brinker | President of Global Operations & Supply Chain | - |
| Mr. Rob Schlissberg | President of Cardinal Health at-Home Solutions | - |
| Ms. Michelle D. Greene | Executive VP and Chief Information Officer of Global Technology & Business Services | 55 |
Audit Risk
9
Board Risk
1
Compensation Risk
1
Shareholder Rights Risk
1
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-08-11
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-04-30
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-10-01
via SEC EDGAR
Income History
via SEC EDGAR
Part 2 · The price and its context
This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Market Reaction Profile
How much CAH moves, measured on its daily prices.
More volatile than 16% of the tracked stocks (90-day volatility).
- Volatility 30d
- 23.7%
- Volatility 90d
- 23.2%
- Beta vs S&P 500 (1y)
- -0.11Correlation -0.05
- Max drawdown (12m)
- -20.6%
- ATR (14d, % of price)
- 2.17%
Earnings reactions
How CAH moved around its past quarterly results.
Next earnings release
Nov 5, 2026 · In 12 days · Before the open
EPS estimate: 2.94Revenue estimate: $66.5B
What usually happens
- Over the last 12 releases the stock moved a median of 4.3% the next day, up or down.
- Next-day moves: up 9, down 3 (out of 12).
- Of the 6 releases that beat estimates, the stock fell the next day after 2.
Release history
| Date | When | EPS est. | EPS actual | Surprise | Gap | 1 day | 5 days |
|---|---|---|---|---|---|---|---|
| Aug 11, 2026 | Before the open | 2.44 | 2.60 | +6.4% | +2.5% | +1.3% | -0.6% |
| Apr 30, 2026 | Before the open | 2.82 | 3.17 | +12.6% | -3.7% | -4.9% | -5.6% |
| Feb 5, 2026 | Before the open | 2.40 | 2.63 | +9.4% | +4.9% | +9.8% | +8.4% |
| Oct 30, 2025 | Before the open | 2.20 | 2.55 | +15.9% | +10.3% | +15.4% | +19.7% |
| Aug 12, 2025 | Before the open | 2.06 | 2.08 | +1.1% | -10.6% | -7.2% | -5.0% |
| May 1, 2025 | Before the open | 2.19 | 2.35 | +7.4% | -0.9% | +3.0% | +8.6% |
| Jan 30, 2025 | Before the open | n/a | n/a | n/a | -0.5% | +0.4% | -0.2% |
| Nov 1, 2024 | Before the open | n/a | n/a | n/a | +4.0% | +7.0% | +8.9% |
| Aug 14, 2024 | Before the open | n/a | n/a | n/a | +6.3% | +3.7% | +6.1% |
| May 2, 2024 | Before the open | n/a | n/a | n/a | -2.1% | +0.8% | -4.6% |
| Feb 1, 2024 | Before the open | n/a | n/a | n/a | -4.8% | -3.7% | -3.2% |
| Nov 3, 2023 | Before the open | n/a | n/a | n/a | +2.7% | +6.9% | +9.6% |
Release dates from SEC 8-K filings.
Updated 10/24/2026
Historical statistics for educational purposes only. They are not forecasts and not investment advice.
Price reaction to the news
Latest news on CAH and what the price did next.
- 6/15/2026NegativeTop 3 Health Care Stocks That May Collapse This Quarter
- +1 day
- -0.6%
- +3 days
- +1.2%
- 3/5/2026PositiveIf You Invested $100 In Cardinal Health Stock 5 Years Ago, You Would Have This Much Today
- +1 day
- +2.1%
- +3 days
- +1.1%
Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.
Latest News
Recent headlines for CAH.
- 6/15/2026NEGATIVETop 3 Health Care Stocks That May Collapse This Quarter
Cardinal Health (CAH) is flagged with a Relative Strength Index (RSI) of 77.7, indicating it is significantly overbought. This technical indicator suggests the stock's price may have risen too quickly and could be due for a correction. While the article mentions positive price action for another stock, TGTX, the primary focus on CAH's overbought condition presents a potential downside risk for investors holding the stock. The RSI levels for TGTX (79.8) and AMRX (76.9) also signal overbought conditions, but CAH is presented as a key warning.
- 3/30/2026NEUTRALHere's How Much You Would Have Made Owning Cardinal Health Stock In The Last 5 Years
An analysis of Cardinal Health Inc. stock performance over the past five years reveals a significant return for investors. While specific figures are not detailed in this summary, the article implies a substantial positive trajectory for the healthcare services company. This historical performance data could be of interest to potential investors looking at long-term value and stability within the healthcare sector, suggesting a potentially resilient investment over the period analyzed.
- 3/10/2026NEUTRALHere's How Much $100 Invested In Cardinal Health 5 Years Ago Would Be Worth Today
An investment of $100 in Cardinal Health Inc. five years ago would have grown to approximately $245 today, representing a significant return on investment. This performance reflects the company's steady growth and resilience in the healthcare sector. For investors, this historical data point highlights Cardinal Health's potential as a long-term holding, underscoring its ability to generate consistent value through strategic operations and market positioning.
- 3/5/2026POSITIVEIf You Invested $100 In Cardinal Health Stock 5 Years Ago, You Would Have This Much Today
An investment of $100 in Cardinal Health (CAH) stock five years ago would have grown to approximately $270 today, yielding a 170% return. This highlights the stock's strong medium-term performance, outperforming many other healthcare players. Growth has been driven by a combination of expansion in its pharmaceutical and medical device businesses, alongside efficient cost management. For investors, Cardinal Health represents an attractive option in the healthcare sector, demonstrating resilience and value creation over time.