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Evaluating Cardinal Health – Look Beyond Technicals to Fundamentals

Cardinal Health logged a 4.1% change during today's evening session, and is now trading at a price of $212.79 per share.

Cardinal Health returned gains of 33.6% last year, with its stock price reaching a high of $233.6 and a low of $137.75. Over the same period, the stock outperformed the S&P 500 index by 10.9%. More recently, the company's 50-day average price was $202.02. Cardinal Health, Inc. operates as a healthcare services and products company in the United States and internationally. Based in Dublin, OH, the Large-Cap Health Care company has 53,084 full time employees. Cardinal Health has offered a 1.0% dividend yield over the last 12 months.

Growing Revenues but Not Enough Current Assets to Cover Current Liabilities:

2020 2021 2022 2023 2024 2025
Revenue (M) $152,922 $162,467 $181,326 $204,979 $226,827 $222,578
Gross Margins 4% 4% 4% 3% 3% 4%
Net Margins -2% 0% -1% 0% 0% 1%
Net Income (M) -$3,696 $611 -$938 $330 $852 $1,561
Net Interest Expense (M) $238 $180 $147 $84 $51 $215
Depreciation & Amort. (M) $405 $377 $412 $441 $470 $488
Diluted Shares (M) 295 281 261 246 243 237
Earnings Per Share $4.04 $2.08 -$3.37 $1.26 $3.45 $6.45
EPS Growth n/a -48.51% -262.02% 137.39% 173.81% 86.96%
Avg. Price $46.6 $50.69 $53.01 $100.8 $118.14 $205.71
P/E Ratio 11.53 24.25 -15.73 79.37 33.95 31.75
Free Cash Flow (M) $1,585 $2,029 $2,788 $2,363 $3,251 $1,850
CAPEX (M) $375 $400 $387 $481 $511 $547
EV / EBITDA -4.5 19.91 -79.37 20.3 18.72 19.79
Total Debt (M) $6,720 $5,342 $4,685 $3,535 $7,062 $8,347
Net Debt / EBITDA -0.81 2.57 -5.29 -0.89 1.9 2.02
Current Ratio 1.17 1.15 1.04 0.98 1.02 0.91

Cardinal Health has growing revenues and increasing reinvestment in the business and positive EPS growth. Additionally, the company's financial statements display generally positive cash flows and healthy leverage levels. However, the firm suffers from slimmer gross margins than its peers and not enough current assets to cover current liabilities because its current ratio is 0.91.

Cardinal Health's Valuation Is in Line With Its Sector Averages:

Cardinal Health has a trailing twelve month P/E ratio of 30.9, compared to an average of 22.94 for the Health Care sector. Based on its EPS guidance of $11.98, the company has a forward P/E ratio of 16.9. Cardinal Health's PEG ratio is 2.48 on the basis of the 12.5% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued.

Cardinal Health Has an Average Rating of Buy:

The 15 analysts following Cardinal Health have set target prices ranging from $215.0 to $275.0 per share, for an average of $245.27 with a buy rating.

Cardinal Health has an average amount of shares sold short because 3.7% of the company's shares are sold short. Institutions own 89.9% of the company's shares, and the insider ownership rate stands at 0.26%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 12% stake in the company is worth $6,063,411,742.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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