Cardinal Health, Inc. (CAH)
Valuation Overview•Is Cardinal Health, Inc. Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Fragile underlying quality score of 45/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
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Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
CAH struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company is facing top-line contraction (-32.3% 3Y CAGR) paired with robust earnings compounding (10.5% EPS 3Y CAGR). However, profitability remains a major concern with severely compressed operating margins (1.0%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $63.9B | +299.3% | -32.3% | -17.1% | -6.3% | |
| EBITDA | $1.0B | — | -16.2% | — | — | |
| Net Income | $394.0M | +330.7% | +6.4% | — | -12.0% | |
| EPS (Diluted) | $1.69 | +325.3% | +10.5% | -4.0% | -8.9% | |
| Free Cash Flow | $1.4B | +0.0% | +24.2% | +17.4% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 3.8% | 3.7% | 3.6% | 4.2% |
| Operating Margin | 1.0% | 0.9% | 0.5% | 0.3% |
| Net Margin | 0.7% | 0.6% | 0.3% | 0.1% |
| FCF Margin | 1.8% | 3.1% | 2.4% | 1.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q3'26Latest | $2.42 | $2.91 | +20.2% | ||
| Q2'26 | $2.79 | $3.17 | +13.6% | ||
| Q1'26 | $2.34 | $2.63 | +12.4% | ||
| Q4'25 | $2.18 | $2.55 | +17.0% | ||
| Q3'25 | $2.04 | $2.08 | +2.0% | ||
| Q2'25 | $2.17 | $2.35 | +8.3% | ||
| Q1'25 | $1.74 | $1.93 | +10.9% | ||
| Q4'24 | $1.62 | $1.88 | +16.0% |
Total return is +44.4% (1Y), outperforming the benchmark by +28.7%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +8.3% | -4.1% | — |
| 1Y | +44.4% | +28.7% | +1.3% |
| 3YCAGR | +36.6% | +15.8% | +6.8% |
| 5YCAGR | +35.1% | +23.8% | +19.5% |
| 10YCAGR | +12.0% | -1.5% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Cardinal Health, Inc. (CAH) valuation, health, and returns.
Cardinal Health, Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Slightly expensive versus peers compared to industry peers. trading near fair value (DCF: $187.94)
Cardinal Health, Inc. has multiple valuation anchors: DCF Intrinsic Value: $187.94 | Peer Relative Fair Value: $187.83 | Wall Street Analyst Target: $273.22 (implying +23.5% upside). A convergence of these signals offers higher conviction.
Cardinal Health, Inc. displays fair financial health with a composite quality score of 45/100, supported by a Altman Z-Score of 4.6 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 82.8%.
Cardinal Health, Inc. pays a 0.9% dividend yield, covered by a 29% payout ratio with 40 years of growth, supplemented by a 2.6% buyback yield.
Cardinal Health, Inc.'s current growth trajectory is Accelerating. The company achieved +299.3% 1Y revenue growth and +325.3% 1Y EPS growth, compared to its 3Y revenue CAGR of -32.3%.
Wall Street consensus is Buy based on 33 analysts, beating EPS expectations in 100% of recent quarters with a 16-quarter streak. The consensus price target represents a +23.5% change from current levels.
Investment risks for Cardinal Health, Inc. include: -20.6% 1-year max drawdown. Volatility risk is characterized by a beta of -0.07x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.