Key Takeaways Cardinal Health will acquire two home-care businesses for about $360 million in cash.The deals add over 245,000 patients annually across diabetes, urology and related care.Both acquisitions are expected to lift non-GAAP EPS within 12 months after closing. Cardinal Health (CAH - Free Report) has agreed to acquire AdaptHealth's (AHCO - Free Report) Diabetes Health business and Strive Medical for approximately $360 million in cash, subject to working capital adjustments. The tuck-in acquisitions strengthen Cardinal Health's at-Home Solutions segment by expanding its presence in diabetes management and urology while broadening its home-based care offerings.
The acquisitions are expected to enhance Cardinal Health's scale in the fast-growing home healthcare market and be accretive to non-GAAP earnings per share within the first year after closing. Backed by the successful integration of Advanced Diabetes Supply, the deals reinforce the company's strategy of driving long-term growth through targeted acquisitions and expanding its leadership in at-home medical supplies.
Likely Trend of CAH Stock Following the NewsShares of CAH have traded flat since the announcement on July 20. In the year-to-date period, shares of the company have gained 10.5% against the industry’s 0.8% decline. The S&P 500 increased 8.7% in the same time frame.
The acquisitions are expected to strengthen Cardinal Health's long-term growth by expanding its at-Home Solutions platform across high-demand therapeutic areas such as diabetes management and urology. The deals add more than 245,000 patients annually, broaden the company's direct-to-patient distribution network and create additional cross-selling opportunities.
Coupled with the successful integration of Advanced Diabetes Supply, these acquisitions should enhance operating scale, deepen customer relationships and support sustainable revenue growth and margin expansion, while reinforcing Cardinal Health's leadership in the rapidly growing home healthcare market.
CAH currently has a market capitalization of $52.87 billion.
Image Source: Zacks Investment Research
More on the NewsThe acquisitions further build on the foundation established by Cardinal Health's earlier purchase of Advanced Diabetes Supply ("ADS"), which has significantly strengthened its at-Home Solutions business. Management noted that the ADS integration has progressed ahead of schedule, with the company successfully migrating all ADS volume onto its technology-enabled distribution network. Since the transaction closed, Cardinal Health has onboarded nearly 500,000 new customers and introduced ContinuCare Pathway, a digital pharmacy-to-supplier referral program designed to simplify patient access to home-based care.
The acquisition of AdaptHealth's Diabetes Health business will meaningfully expand Cardinal Health's diabetes care franchise. The business serves more than 225,000 patients annually through a centralized, mail-order, direct-to-patient model, supplying products such as continuous glucose monitors for ongoing diabetes management. Meanwhile, Strive Medical adds a complementary portfolio focused on urology, wound care, ostomy and incontinence supplies, serving more than 20,000 patients annually. Together, these assets broaden Cardinal Health's capabilities across key therapeutic categories while increasing the scale of its home medical supplies platform.
Management believes that the transactions will further strengthen Cardinal Health's ability to deliver high-quality care at scale and support its long-term strategy of combining organic growth with targeted acquisitions. Subject to customary closing conditions and regulatory approvals, both deals are expected to be accretive to non-GAAP earnings per share within the first 12 months after closing. The company expects the expanded platform to enhance operational efficiencies, deepen customer relationships and reinforce its leadership position in the rapidly evolving home healthcare market.
Favorable Industry Prospect for CAHGoing by the data provided by Grand View Research, the global home healthcare market size is projected to grow from $504.8 billion in 2026 to $1015.8 billion by 2033, at a CAGR of 10.5% from 2026 to 2033.
The market is driven by rising demand for cost-effective alternatives to curb rising healthcare costs and the growing penetration of the virtual and remote care industry.
Recent Development by CAHIn April, CAH expanded its Actinium-225 (Ac-225) production capabilities at its Center for Theranostics Advancement in Indianapolis by adding a high-capacity production line to its Drug Master File. The move significantly boosts the supply of cGMP-compliant Ac-225 for investigational therapies and future commercial manufacturing.
Ac-225 is a key radionuclide used in targeted cancer treatments, including therapies for prostate, breast and neuroendocrine cancers. The expansion strengthens Cardinal Health's position in the fast-growing radiopharmaceutical market while helping address the industry's supply constraints.
CAH’s Zacks Rank & Other Key PicksCurrently, CAH carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks from the broader medical space are West Pharmaceutical (WST - Free Report) and Intuitive Surgical (ISRG - Free Report) . WST sports a Zacks Rank #1 (Strong Buy), while ISRG carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.4%.
Intuitive Surgical reported first-quarter 2026 adjusted EPS of $2.50, which beat the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion surpassed the Zacks Consensus Estimate by 6.2%.
Intuitive Surgical has an estimated long-term earnings growth rate of 14.3%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Cardinal Health (CAH - Free Report) . CAH is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 15.48. This compares to its industry's average Forward P/E of 16.88. CAH's Forward P/E has been as high as 20.15 and as low as 13.69, with a median of 15.30, all within the past year.
CAH is also sporting a PEG ratio of 1.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CAH's industry currently sports an average PEG of 1.90. Over the last 12 months, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, our model also underscores that CAH has a P/CF ratio of 15.27. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.89. Over the past 52 weeks, CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12.
These are only a few of the key metrics included in Cardinal Health's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CAH looks like an impressive value stock at the moment.
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What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
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Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Medical stock. CAH has a Momentum Style Score of B, and shares are up 1.4% over the past four weeks.
One analyst revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.01 to $10.77 per share. CAH also boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CAH should be on investors' short list.
A Cardinal Health logo appears in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab
CompaniesJuly 20 (Reuters) - Cardinal Health (CAH.N), opens new tab said on Monday it has agreed to buy AdaptHealth's (AHCO.O), opens new tab diabetes health business and medical supply provider Strive Medical in separate deals for about $360 million in total, expanding its home care business.
Here are some details
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The Dublin, Ohio based company said the acquisitions would expand its at-Home Solutions business and build on its earlier purchase of Advanced Diabetes Supply.
AdaptHealth's Diabetes Health business provides devices such as continuous glucose monitors and insulin pumps, along with related services for people with diabetes.
The deal broadens Cardinal Health's reach in diabetes care by adding AdaptHealth's direct-to-patient platform for supplies and support services, and enhances its urology business with the addition of Strive Medical.
Cardinal Health said the deals are expected to add to its adjusted earnings per share in the first 12 months after closing.
Leerink Partners analyst Michael Cherny said the acquisitions were logical, strategic tuck-ins for Cardinal Health, though he noted the diabetes business would need operational improvements to restore growth and profitability. Cherny said Cardinal's scale should help it execute that turnaround.
AdaptHealth separately said Cardinal Health would pay $235 million in cash for the diabetes unit.
Strive Medical serves more than 20,000 people annually and specializes in urology, wound care, ostomy and adult care supplies.
Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Cardinal Health (CAH - Free Report) closed at $225.75 in the latest trading session, marking a -1.21% move from the prior day. This change lagged the S&P 500's 0.19% loss on the day. Elsewhere, the Dow saw a downswing of 0.59%, while the tech-heavy Nasdaq depreciated by 0.05%.
The prescription drug distributor's shares have seen an increase of 3.04% over the last month, not keeping up with the Medical sector's gain of 6.06% and outstripping the S&P 500's gain of 0.55%.
Analysts and investors alike will be keeping a close eye on the performance of Cardinal Health in its upcoming earnings disclosure. The company's earnings report is set to go public on August 11, 2026. The company is forecasted to report an EPS of $2.42, showcasing a 16.35% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $65.61 billion, up 9.06% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $10.77 per share and a revenue of $256.24 billion, indicating changes of +30.7% and +15.12%, respectively, from the former year.
Investors should also pay attention to any latest changes in analyst estimates for Cardinal Health. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.29% higher. Cardinal Health is currently sporting a Zacks Rank of #2 (Buy).
In terms of valuation, Cardinal Health is presently being traded at a Forward P/E ratio of 19.02. This represents a premium compared to its industry average Forward P/E of 17.36.
Meanwhile, CAH's PEG ratio is currently 1.12. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Medical - Dental Supplies stocks are, on average, holding a PEG ratio of 1.87 based on yesterday's closing prices.
The Medical - Dental Supplies industry is part of the Medical sector. This industry, currently bearing a Zacks Industry Rank of 63, finds itself in the top 26% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
, /PRNewswire/ -- Cardinal Health (NYSE: CAH) announced today it has entered into two definitive agreements that accelerate its at-Home Solutions' growth strategy.
Cardinal Health will acquire the Diabetes Health business of AdaptHealth Corp. (NASDAQ: AHCO), and, in its entirety, Strive Medical, a multi-specialty supply provider with a focus on urology. Combined, the transactions total approximately $360 million in cash, subject to working capital adjustments.
"These strategic transactions build on the synergies created by our recent investments in home care," said Jason Hollar, Chief Executive Officer, Cardinal Health. "As a natural extension of our at-Home Solutions growth strategy, they expand our enterprise-wide depth and breadth across important therapeutic categories like diabetes management and urology, further strengthening our leadership in a highly dynamic industry."
Both agreements enhance the framework established by Cardinal Health's most recent acquisition of Advanced Diabetes Supply (ADS). The company recently highlighted the progress of its at-Home Solutions business one year after its acquisition of ADS, including integration achievements that were realized ahead of plan. Since closing the original ADS transaction, the team successfully migrated all ADS volume onto the at-Home Solutions efficient and technology-enabled distribution network, onboarded nearly 500,000 new customers, and launched ContinuCare Pathway, a unique pharmacy-to-supplier digital referral pathway program.
"Our significant operational achievements in FY26 position us to continue building the country's leading platform to deliver simplified, innovative and high-quality care in the home, both organically and through acquisition," said Rob Schlissberg, President of Cardinal Health at-Home Solutions.
Layering these transactions on top of previous investments in the at-Home Solutions business also expands the company's ability to deliver high-quality service at scale.
AdaptHealth's Diabetes Health business, which serves more than 225,000 people annually, operates primarily as a centralized, mail-order, direct-to-patient model that delivers supplies like continuous glucose monitors to support the ongoing management of diabetes.
Strive Medical serves more than 20,000 people annually as one of the nation's leading independent home medical supply providers specializing in urology, wound care, ostomy, and incontinence supplies, expanding Cardinal Health's enterprise-wide capabilities in this critical therapeutic area.
These transactions are subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals, and are expected to be accretive to non-GAAP earnings per share in the first 12 months following close.
Advisors
J.P. Morgan Securities LLC served as financial advisor to Cardinal Health on both acquisitions. Skadden, Arps, Slate, Meagher & Flom LLP and DLA Piper served as legal advisors to Cardinal Health on the acquisition of AdaptHealth's diabetes business. BakerHostetler LLP and DLA Piper LLP served as legal advisors to Cardinal Health on the acquisition of Strive Medical.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals and specialty products; a global manufacturer and distributor of medical and laboratory products; a supplier of home-health and direct-to-patient products and services; an operator of nuclear pharmacies and manufacturing facilities; and a provider of performance and data solutions. Our company's customer-centric focus drives continuous improvement and leads to innovative solutions that improve people's lives every day. Learn more about Cardinal Health at cardinalhealth.com and in our Newsroom.
About AdaptHealth
AdaptHealth Corp. is a national leader in providing patient-centered, healthcare-at-home solutions, including home medical equipment (HME), medical supplies, and related services. Through its network of full-service medical equipment providers, AdaptHealth delivers tailored products and services designed to help patients manage chronic conditions and live independently in their homes. It serves beneficiaries of Medicare, Medicaid, and commercial insurance plans and reaches millions of patients annually.
About Strive Medical LLC
Strive Medical, an NMS Capital portfolio company, is a leading national durable medical equipment (DME) provider specializing in urology, incontinence, and wound care supplies delivered directly to patients. As an Accreditation Commission for Health Care (ACHC) accredited organization, Strive Medical manages the full insurance billing process – including Medicare, Medicaid, and over 5,000 private insurance plans – making access to essential supplies seamless for patients and referring providers alike. For more information, visit strivemedical.com
Contacts
Media: Cari Wildasinn, [email protected] and (614) 757-8287
Investors: David Frost, [email protected] and (614) 553-4460
Cautions Concerning Forward-Looking Statements
This news release contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook, and various accruals and estimates. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties include risks associated with the planned acquisitions addressed in this release, including the risk that we may not receive required regulatory approval or otherwise fail to complete one or both of the acquisitions and the risk that we may fail to realize the anticipated strategic and financial benefits of the acquisitions. Cardinal Health is subject to additional risks and uncertainties described in Cardinal Health's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports. This news release reflects management's views as of July 20, 2026. Except to the extent required by applicable law, Cardinal Health undertakes no obligation to update or revise any forward-looking statement. Forward-looking statements are aspirational and not guarantees or promises that goals, targets or projections will be met, and no assurance can be given that any expectation, initiative or plan in this news release can or will be achieved or completed.
Cardinal Health (CAH - Free Report) ended the recent trading session at $230.11, demonstrating a -1.52% change from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.38%. Meanwhile, the Dow experienced a rise of 0.02%, and the technology-dominated Nasdaq saw an increase of 0.9%.
The stock of prescription drug distributor has risen by 3.21% in the past month, lagging the Medical sector's gain of 4.34% and overreaching the S&P 500's gain of 1.27%.
The upcoming earnings release of Cardinal Health will be of great interest to investors. The company's earnings report is expected on August 11, 2026. In that report, analysts expect Cardinal Health to post earnings of $2.42 per share. This would mark year-over-year growth of 16.35%. Meanwhile, our latest consensus estimate is calling for revenue of $65.61 billion, up 9.06% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates project earnings of $10.77 per share and a revenue of $256.24 billion, demonstrating changes of +30.7% and +15.12%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Cardinal Health. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.29% higher within the past month. Cardinal Health currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Cardinal Health has a Forward P/E ratio of 19.45 right now. This signifies a premium in comparison to the average Forward P/E of 17.08 for its industry.
It is also worth noting that CAH currently has a PEG ratio of 1.14. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Medical - Dental Supplies industry had an average PEG ratio of 1.86.
The Medical - Dental Supplies industry is part of the Medical sector. With its current Zacks Industry Rank of 64, this industry ranks in the top 27% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
The medical supply industry has entered the second half of 2026 from a position of strength, supported by resilient healthcare utilization, rising specialty care demand, increasing adoption of digital technologies and continued migration of patient care toward lower-cost outpatient settings.
Across major industry participants, management highlighted healthy procedure volumes, growing investment by healthcare providers, expanding specialty pharmaceutical utilization and stronger demand for technology-enabled workflow solutions. At the same time, companies continue to modernize supply chains through automation and AI while investing in value-added services that improve efficiency for providers and patients. However, the industry is not without challenges. Tariff-related cost pressures, pricing changes tied to healthcare policy, uneven demand in certain product categories and macroeconomic uncertainty continue to create operational complexity.
Companies with diversified business models, technology leadership, specialty exposure and disciplined capital allocation appear well positioned to capitalize on these favorable industry tailwinds through the remainder of 2026. Per a Markets and Markets report, the global medical supplies industry is expected to reach $163.5 billion by 2027, at a CAGR of 3.4% in the 2022-2027 period. Industry participants, such as McKesson, Cardinal Health, West Pharmaceutical Services, Align Technology and Henry Schein, are likely to ride on the favorable macro trends amid lingering tariff risks.
Industry DescriptionThe global dental industry consists of companies that design, develop, make and market dental products, such as consumables, laboratory products and specialty items. Some of these companies also offer software and systems for practice management, patient education and office administration. Dental stocks have been drawing attention amid a recovery in sales following the weakness caused by pandemic-induced disruptions. The market has been recovering and maintaining its position.
Dental care is provided based on the advice and recommendations of the American Dental Association and the Centers for Disease Control and Prevention. Thanks to the rebound seen among companies in this space, patient volumes have been increasing steadily following the removal of COVID-19 restrictions.
Major Trends Shaping the Future of the Medical Dental Supplies IndustrySpecialty Care and Outpatient Healthcare Support Industry Growth: Healthcare delivery continues shifting toward specialty therapies, community-based care and non-acute treatment settings, creating sustained demand for medical distribution and support services. Specialty pharmaceuticals, oncology services, home-based care, ambulatory surgical centers and precision medicine remain among the industry's fastest-growing segments.
Companies are expanding provider networks, investing in specialty capabilities and strengthening patient access platforms to benefit from higher-acuity care migrating outside traditional hospitals. This structural transition supports long-term volume growth while increasing demand for integrated distribution, logistics and patient support solutions.
AI, Automation and Digital Innovations: Medical supply companies are increasingly leveraging AI, automation and cloud-based platforms to improve provider productivity, optimize supply chains and enhance patient engagement. Investments range from AI-enabled inventory planning and automated distribution centers to digital treatment planning, practice management software and workflow automation.
These technologies are helping providers improve efficiency, reduce administrative burdens and expand patient access while allowing distributors to enhance operational resilience and margins. As healthcare systems prioritize productivity improvements, technology-enabled service offerings are becoming an increasingly important source of competitive advantage and long-term growth.
Increasing Burden of Oral Diseases and an Aging Population: The U.S. dental equipment market is structurally supported by demographic aging and rising disease prevalence. Older cohorts account for a disproportionate share of restorative and surgical procedures, reflecting a higher incidence of caries, periodontal disease, and tooth loss. With the 65+ population expanding, demand visibility remains strong, reinforcing procedure volumes and equipment utilization across practices.
Growing Awareness and Emphasis on Preventive Care: Rising awareness of oral hygiene and preventive care is shifting demand toward early-stage interventions. Increased utilization of fluoride treatments, sealants, and prophylaxis products reflects a broader transition toward prevention-focused dentistry, supporting recurring revenue streams within consumables.
Minimally Invasive and Cosmetic Dentistry Trends: Patient preference is increasingly skewed toward minimally invasive and aesthetic procedures, including whitening and veneers. This trend is expanding demand for specialized materials and precision equipment, while also increasing procedure frequency and average spend per patient.
Expansion of Dental Clinics and Group Practices: The ongoing expansion of dental clinics, DSOs, and hospital-based practices is structurally increasing equipment demand. Higher patient throughput, standardized treatment protocols, and procurement efficiencies are driving consistent product utilization across growing care networks.
Regional Market Growth Drivers: Emerging markets, particularly in Asia-Pacific, are exhibiting above-average growth due to rising healthcare expenditure, improving access, and supportive policy frameworks. Dental tourism and expanding middle-class demand are further accelerating equipment adoption in these regions
Policy Changes and Ongoing Cost Inflation: Despite healthy demand, companies continue navigating an increasingly complex operating environment. Tariffs, healthcare policy changes, pharmaceutical pricing reforms under the Inflation Reduction Act, higher freight costs and inflationary pressures remain important headwinds.
Several companies also cited softer demand in select product categories, such as respiratory diagnostics following a mild flu season, while competitive pricing in certain technology markets continued to weigh on margins. Although management remains confident in mitigating these pressures through pricing actions, productivity initiatives and supply-chain improvements, these headwinds are likely to remain through the second half of 2026.
Zacks Industry RankThe Zacks Medical Dental Supplies industry falls within the broader Zacks Medical sector.
It carries a Zacks Industry Rank #68, which places it in the top 28% of 243 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Before we present a few dental supply stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry PerformanceThe industry has outperformed its sector but underperformed the S&P 500 composite in the past year.
Stocks in this industry collectively gained 10.2% compared with the Zacks Medical sector’s rise of 9.6%. The S&P 500 has surged 24.2% in the same time frame.
Industry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 16.83X compared with the S&P 500’s 21.23X and the sector’s 21.07X.
Over the past five years, the industry has traded as high as 21.75X and as low as 15.53X, with the median being 18.44X.
5 Key Dental Supply PicksMcKesson remains one of the strongest beneficiaries of the industry's accelerating shift toward specialty care and technology-enabled healthcare services. The company continues to expand its oncology and multispecialty ecosystem through the integration of Core Ventures and PRISM Vision, broadening its presence across community oncology, retina and ophthalmology.
Management also highlighted continued momentum in biopharma services, where rising demand for access and affordability programs, particularly for complex specialty therapies, is strengthening its value proposition. AI-enabled workflow tools, automation and advanced distribution capabilities are further improving physician productivity, patient access and supply-chain efficiency. Investments in AI-powered inventory planning, highly automated distribution centers and technology infrastructure are expected to support operating leverage while enhancing service reliability.
McKesson's disciplined capital allocation, robust free cash flow generation and continued investment in automation reinforce confidence in sustained earnings growth. However, the company continues to operate in a dynamic policy environment, with pharmaceutical pricing reforms, evolving utilization patterns and continued investments in technology infrastructure likely to influence near-term profitability.
The Zacks Consensus Estimate for fiscal 2027 revenues indicates an improvement of 7.3% from the year-ago reported figure, while the same for earnings implies a rise of 13.2%. MCK carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has entered the second half of 2026 with strong momentum, driven by broad-based pharmaceutical demand and rapid expansion across its higher-growth businesses. Specialty pharmaceuticals remain the primary growth engine, with specialty revenues expected to exceed $50 billion during fiscal 2026, supported by robust demand for oncology therapies, GLP-1 products and branded medicines.
Beyond pharmaceutical distribution, the company continues to benefit from accelerating growth in At-Home Solutions, Nuclear and Precision Health Solutions and OptiFreight Logistics, reflecting increasing demand for decentralized care, theranostics and healthcare supply-chain optimization. Strategic acquisitions, including Advanced Diabetes Supply, are expanding Cardinal Health's chronic care capabilities while strengthening its long-term growth platform.
Operational discipline and resilient execution have also enabled the company to navigate complex market conditions effectively. Nevertheless, tariff-related costs remain a significant headwind for the Global Medical Products and Distribution segment, while the Navista goodwill impairment underscores execution risks within certain growth initiatives. Future performance will also depend on continued success in managing supply-chain costs and evolving healthcare policy changes.
The Zacks Consensus Estimate for fiscal 2026 revenues indicates an improvement of 15.1% from the year-ago reported figure, while the same for earnings implies a rise of 30.7%. CAH carries a Zacks Rank #2 at present.
West Pharmaceutical Services remains well positioned to benefit from long-term growth in biologics and high-value injectable therapies, supported by sustained demand for advanced drug containment and delivery solutions. Management emphasized continued strength across its High-Value Products portfolio, with increasing customer adoption of premium components and proprietary delivery technologies driving favorable product mix and margin expansion.
The company's strategy is also supported by healthy demand for biologics, expanding capacity investments and growing participation in next-generation injectable medicines. This positions West Pharma to capitalize on structural trends in pharmaceutical innovation. Operational improvements and disciplined manufacturing execution continue to strengthen profitability while reinforcing customer relationships with leading biopharma companies.
However, management acknowledged that macroeconomic uncertainty, customer inventory normalization in selected product categories and the pace of new drug commercialization could create periodic revenue variability. Despite these risks, West Pharma's innovation-led portfolio, diversified customer base and focus on high-value solutions provide a solid foundation for continued growth through the remainder of 2026.
The Zacks Consensus Estimate for 2026 revenues indicates an improvement of 8.4% from the year-ago reported figure, while the same for earnings implies a rise of 18%. WST carries a Zacks Rank of 2 at present.
Align Technology is well positioned to benefit from the continued digitization of orthodontics and the growing adoption of clear aligner therapy. The company delivered record Invisalign case shipments in the first quarter, supported by broad-based growth across adults, teens and younger patients, while international markets continued to outpace North America. Management also highlighted strong momentum in dental service organizations (DSOs), which are increasingly adopting Align Technology's integrated digital platform to improve clinical workflows and patient conversion.
The expanding installed base of iTero scanners, rising adoption of exocad software and the rollout of restorative treatment solutions further strengthen Align Technology's digital ecosystem and create opportunities beyond orthodontics. Financing programs, doctor subscription models and treatment planning services are also improving affordability, clinician confidence and utilization, supporting long-term case growth. However, softer patient traffic in parts of the U.S. retail channel, pricing pressure from lower-cost scanner offerings and uneven macroeconomic conditions across certain markets remain key challenges to monitor through the remainder of 2026.
The Zacks Consensus Estimate for 2026 revenues indicates an improvement of 3.7% from the year-ago reported figure, while the same for earnings implies a rise of 8.1%. ALGN carries a Zacks Rank #2 at present.
Henry Schein has entered the second half of 2026 with improving operating momentum, supported by market share gains, expanding digital capabilities and a sharpened focus on operational excellence. Management sees healthy demand across dental markets, with continued investments by dental service organizations (DSOs) and practitioners supporting equipment, merchandise and specialty product sales.
The company's integrated portfolio — including distribution, specialty products, practice management software and value-added services — positions it to benefit from customers' increasing focus on productivity and workflow optimization. AI-enabled practice management solutions, cloud-based software adoption and ongoing value creation initiatives are expected to drive margin expansion while strengthening customer engagement. Growth in value implants, home solutions and non-acute care channels provides additional tailwinds, while restructuring initiatives and supply-chain efficiencies should further enhance profitability.
Nevertheless, Henry Schein continues to face pricing pressure in digital equipment from new market entrants, softer demand for respiratory diagnostic products following a mild flu season, and cost inflation from higher freight and merchandise prices. Effective execution of its transformation initiatives will remain critical to sustaining earnings growth through the rest of 2026.
The Zacks Consensus Estimate for 2026 revenues indicates an improvement of 4.1% from the year-ago reported figure, while the same for earnings implies a rise of 7%. HSIC carries a Zacks Rank of 2 at present.
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If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Cardinal Health (CAH - Free Report) . This company, which is in the Zacks Medical - Dental Supplies industry, shows potential for another earnings beat.
This prescription drug distributor has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 11.63%.
For the most recent quarter, Cardinal was expected to post earnings of $2.8 per share, but it reported $3.17 per share instead, representing a surprise of 13.21%. For the previous quarter, the consensus estimate was $2.39 per share, while it actually produced $2.63 per share, a surprise of 10.04%.
Price and EPS Surprise
For Cardinal, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Cardinal has an Earnings ESP of +1.24% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #2 (Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 11, 2026.
With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.
By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Cardinal Health (CAH - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
While there are numerous reasons why the stock of this prescription drug distributor is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Cardinal is 17.1%, investors should actually focus on the projected growth. The company's EPS is expected to grow 11.5% this year, crushing the industry average, which calls for EPS growth of 7.5%.
Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric shows how efficiently a firm is utilizing its assets to generate sales.
Right now, Cardinal has an S/TA ratio of 4.49, which means that the company gets $4.49 in sales for each dollar in assets. Comparing this to the industry average of 0.72, it can be said that the company is more efficient.
While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And Cardinal is well positioned from a sales growth perspective too. The company's sales are expected to grow 8.8% this year versus the industry average of 3.9%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Cardinal. The Zacks Consensus Estimate for the current year has surged 0.3% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Cardinal a Zacks Rank #2 stock, it has earned itself a Growth Score of A based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination positions Cardinal well for outperformance, so growth investors may want to bet on it.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CAH has a Growth Style Score of A, forecasting year-over-year earnings growth of 30.7% for the current fiscal year.
For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $10.77 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CAH should be on investors' short list.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about Cardinal Health (CAH - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Cardinal currently has an average brokerage recommendation (ABR) of 1.35, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 17 brokerage firms. An ABR of 1.35 approximates between Strong Buy and Buy.
Of the 17 recommendations that derive the current ABR, 14 are Strong Buy, representing 82.4% of all recommendations.
Brokerage Recommendation Trends for CAH
Check price target & stock forecast for Cardinal here>>>
The ABR suggests buying Cardinal, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CAH Worth Investing In?In terms of earnings estimate revisions for Cardinal, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $10.76.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Cardinal. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Cardinal.
Key Takeaways Cardinal Health's Russell index removal reflects reclassification, not weakening business fundamentals.CAH's specialty platform and higher-margin businesses continue driving revenue and profit growth.Cardinal Health's pharmaceutical distribution business posted strong growth, supported by specialty demand. Cardinal Health's (CAH - Free Report) removal from the Russell 1000 Defensive, Russell 1000 Growth-Defensive and Russell 1000 Value-Defensive indices may initially appear concerning, but the development is more technical than fundamental. The healthcare distributor's exclusion largely reflects Russell's periodic index reclassification following a sharp appreciation in Cardinal Health's share price, rather than any deterioration in its business performance.
After soaring more than 70% in 2025, the stock has already added another 15.4% year to date. The company’s share price performance so far this year has outperformed the industry’s 0.2% decline and S&P 500 Index’s 9.9% gain.
While index-linked funds tracking these benchmarks may trim their holdings, potentially creating short-term selling pressure, the removal does not signal weakening fundamentals or lower earnings expectations. In fact, sentiment around the company remains constructive, with several Wall Street analysts recently raising their price targets.
YTD Performance of CAH vs Industry
Image Source: Zacks Investment Research
Cardinal Health continues to strengthen its position as one of the three dominant U.S. pharmaceutical distributors alongside McKesson (MCK - Free Report) and Cencora (COR - Free Report) . Its latest quarterly performance reinforced this thesis, as Pharmaceutical and Specialty Solutions once again delivered double-digit revenue and profit growth, while high-margin businesses (including at-Home Solutions, Nuclear & Precision Health Solutions and OptiFreight Logistics) continued to outgrow the core distribution business.
Coupled with sustained healthcare utilization, demographic tailwinds and increasing specialty drug adoption, Cardinal Health's long-term investment case appears driven by operational execution rather than index membership.
Key Drivers of CAH’s GrowthSpecialty Healthcare Platform as a Powerful Growth Engine: Cardinal Health's strategy of expanding beyond traditional pharmaceutical distribution is steadily improving its earnings profile. Specialty revenues are expected to exceed $50 billion in fiscal 2026, supported by rapid expansion of its Specialty Alliance physician network, Solaris integration and growing biopharma solutions capabilities.
The Specialty segment profit continues to outpace revenue growth as higher-margin services complement pharmaceutical distribution. Management also highlighted strong momentum in MSO platforms and Sonexus patient-support services, reinforcing specialty healthcare as a durable multiyear growth driver.
High-Growth Businesses Are Diversifying Profit Sources: Cardinal Health's "Other Growth Businesses" have evolved into meaningful contributors to earnings. Revenues from at-Home Solutions, Nuclear & Precision Health Solutions and OptiFreight Logistics surged 31%, while segment profit climbed 34% during the quarter.
Strong demand for home-based care, theranostics and healthcare logistics continues to support growth. ADS integration, expansion of ContinuCare Pathway and investments in distribution infrastructure further strengthen Cardinal Health's ability to capture secular healthcare trends that extend well beyond traditional drug distribution.
Core Pharmaceutical Distribution Remains Exceptionally Resilient: Despite industry pricing changes, Cardinal Health continues demonstrating impressive operating leverage. Pharmaceutical segment revenues increased 11% to $56.1 billion, while segment profit advanced 18%, benefiting from strong specialty demand, stable generic economics and resilient branded pharmaceutical volumes.
GLP-1 therapies alone contributed six percentage points to quarterly revenue growth. Investments in automation, distribution infrastructure and supply-chain efficiency continue supporting record service levels, positioning the company to capitalize on rising prescription volumes and long-term healthcare demand.
A Glance at CAH’s EstimatesThe Zacks Consensus Estimate for CAH’s fiscal 2026 and 2027 earnings per share (EPS) implies year-over-year growth of 30.6% and 11.3%, respectively, to $10.76 and $11.98. In the past 60 days, the consensus mark for the company's fiscal 2026 EPS has remained stable.
Revenues for fiscal 2026 are projected to grow 15.1% to $256.24 billion and another 8.8% to $278.75 billion in fiscal 2027.
Image Source: Zacks Investment Research
Competition Remains Intense, but Cardinal Health Is Closing the GapCompetition among the "Big Three" distributors remains fierce. McKesson continues to leverage its expanding oncology platform, biopharma services and AI-enabled supply chain while delivering double-digit operating profit growth across specialty businesses. Cencora continues to invest aggressively in specialty pharmaceuticals, MSO platforms and digital transformation while strengthening its global specialty logistics capabilities.
However, Cardinal Health has significantly narrowed the competitive gap through the rapid expansion of its specialty business, strong growth in Nuclear & Precision Health Solutions and accelerating growth in at-Home Solutions. While McKesson currently benefits from a broader oncology portfolio and Cencora continues to expand its global specialty capabilities, Cardinal Health appears increasingly differentiated through its diversified healthcare services portfolio.
As McKesson, Cencora and Cardinal Health continue to invest aggressively in specialty care, competitive intensity is likely to remain elevated across the healthcare distribution landscape.
Risks and ChallengesDespite its strong outlook, several risks warrant attention. Inflation Reduction Act pricing adjustments continue creating revenue headwinds despite limited profit impact. Tariff-related uncertainty remains concentrated within the Global Medical Products and Distribution business, while integration risks surrounding Solaris and ADS acquisitions require successful execution.
Specialty growth also depends on successful physician network expansion and sustained pharmaceutical demand. Additionally, reimbursement reforms, changing drug pricing dynamics and competitive investments by McKesson and Cencora could pressure long-term margins across the healthcare distribution industry.
ConclusionAlthough Russell index removal may trigger temporary passive fund selling, it does not alter Cardinal Health's improving fundamentals. Strong execution across specialty healthcare, pharmaceutical distribution and higher-margin growth businesses support a favorable long-term outlook. While competitive and regulatory risks remain, the company's structural growth drivers remain intact. According to the Zacks Consensus Estimate, the average target price still implies roughly 5.6% upside from current levels.
Image Source: Zacks Investment Research
With a Zacks Rank #3 (Hold), existing CAH investors may find sufficient reasons to retain the stock while monitoring continued execution in its specialty-led growth strategy. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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DUBLIN, Ohio, July 9, 2026 /PRNewswire/ -- Cardinal Health (NYSE: CAH) plans to release fourth-quarter and year-end financial results for its fiscal year 2026 on August 11, prior to the opening of trading on the New York Stock Exchange. The company will webcast a discussion of these results beginning at 8:30 a.m. Eastern.
To access the webcast and corresponding slide presentation, visit Cardinal Health's Investor Relations page. No access code is required. Presentation slides and a webcast replay will be available on the Investor Relations page for 12 months.
About Cardinal Health
Cardinal Health is a distributor of pharmaceuticals and specialty products; a supplier of home-health and direct-to-patient products and services; an operator of nuclear pharmacies and manufacturing facilities; a provider of performance and data solutions; and a global manufacturer and distributor of medical and laboratory products. Our company's customer-centric focus drives continuous improvement and leads to innovative solutions that improve people's lives every day. Learn more about Cardinal Health at cardinalhealth.com and in our Newsroom.
In the latest close session, Cardinal Health (CAH - Free Report) was down 1.07% at $237.15. The stock's change was less than the S&P 500's daily loss of 0.28%. Elsewhere, the Dow saw a downswing of 1.09%, while the tech-heavy Nasdaq appreciated by 0.2%.
The stock of prescription drug distributor has risen by 12.72% in the past month, leading the Medical sector's gain of 7.8% and the S&P 500's gain of 1.64%.
The investment community will be paying close attention to the earnings performance of Cardinal Health in its upcoming release. It is anticipated that the company will report an EPS of $2.41, marking a 15.87% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $65.61 billion, up 9.06% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $10.76 per share and revenue of $256.24 billion, which would represent changes of +30.58% and +15.12%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Cardinal Health. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Cardinal Health currently has a Zacks Rank of #3 (Hold).
Looking at valuation, Cardinal Health is presently trading at a Forward P/E ratio of 20.01. For comparison, its industry has an average Forward P/E of 17.04, which means Cardinal Health is trading at a premium to the group.
Investors should also note that CAH has a PEG ratio of 1.18 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Medical - Dental Supplies industry was having an average PEG ratio of 1.88.
The Medical - Dental Supplies industry is part of the Medical sector. Currently, this industry holds a Zacks Industry Rank of 81, positioning it in the top 33% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Cardinal Health receives a Buy rating, supported by defensive business fundamentals, strong adjusted EPS growth, and strategic expansion into specialty healthcare. CAH's Q3FY26 showed 11% revenue growth and 35% adjusted EPS growth, though GAAP results were pressured by higher costs and special items. Valuation is at a premium with a Forward P/E of 21.64x, justified by improving profitability and cash flow, but future upside depends on sustained margin gains.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 19.95; value investors should take notice.
Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.20 to $10.76 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CAH should be on investors' short list.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Medical stock. CAH has a Momentum Style Score of B, and shares are up 21.4% over the past four weeks.
For fiscal 2026, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.20 to $10.76 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CAH should be on investors' short list.
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Cardinal Health (CAH - Free Report) . CAH is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 15.48, which compares to its industry's average of 16.51. Over the last 12 months, CAH's Forward P/E has been as high as 20.15 and as low as 13.69, with a median of 15.30.
CAH is also sporting a PEG ratio of 1.24. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CAH's industry has an average PEG of 1.85 right now. Within the past year, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, investors will want to recognize that CAH has a P/CF ratio of 15.27. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. CAH's current P/CF looks attractive when compared to its industry's average P/CF of 17.54. Over the past year, CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Cardinal Health is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAH feels like a great value stock at the moment.
Cardinal Health (CAH - Free Report) ended the recent trading session at $237.92, demonstrating a +1.35% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.05%. At the same time, the Dow lost 0.09%, and the tech-heavy Nasdaq lost 0.24%.
The prescription drug distributor's stock has climbed by 17.46% in the past month, exceeding the Medical sector's gain of 4.42% and the S&P 500's loss of 1.42%.
The upcoming earnings release of Cardinal Health will be of great interest to investors. The company is forecasted to report an EPS of $2.41, showcasing a 15.87% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $65.61 billion, reflecting a 9.06% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.76 per share and a revenue of $256.24 billion, representing changes of +30.58% and +15.12%, respectively, from the prior year.
Any recent changes to analyst estimates for Cardinal Health should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Cardinal Health holds a Zacks Rank of #2 (Buy).
From a valuation perspective, Cardinal Health is currently exchanging hands at a Forward P/E ratio of 21.81. This expresses a premium compared to the average Forward P/E of 16.16 of its industry.
It's also important to note that CAH currently trades at a PEG ratio of 1.28. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Medical - Dental Supplies industry was having an average PEG ratio of 1.7.
The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 83, putting it in the top 35% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Shares of Cardinal Health (CAH - Free Report) have been strong performers lately, with the stock up 16.6% over the past month. The stock hit a new 52-week high of $235.71 in the previous session. Cardinal has gained 13.4% since the start of the year compared to the -2.7% move for the Zacks Medical sector and the -3.6% return for the Zacks Medical - Dental Supplies industry.
What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 30, 2026, Cardinal reported EPS of $3.17 versus consensus estimate of $2.8 while it missed the consensus revenue estimate by 2.27%.
For the current fiscal year, Cardinal is expected to post earnings of $10.76 per share on $256.24 in revenues. This represents a 30.58% change in EPS on a 15.12% change in revenues. For the next fiscal year, the company is expected to earn $11.98 per share on $278.75 in revenues. This represents a year-over-year change of 11.29% and 8.79%, respectively.
Valuation MetricsCardinal may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Cardinal has a Value Score of A. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 21.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 16X. On a trailing cash flow basis, the stock currently trades at 20X versus its peer group's average of 11.6X. Additionally, the stock has a PEG ratio of 1.27. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Cardinal an interesting choice for value investors.
Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Cardinal currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Cardinal passes the test. Thus, it seems as though Cardinal shares could have a bit more room to run in the near term.
How Does CAH Stack Up to the Competition?Shares of CAH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Align Technology, Inc. (ALGN - Free Report) . ALGN has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. Align Technology, Inc. beat our consensus estimate by 14.16%, and for the current fiscal year, ALGN is expected to post earnings of $11.36 per share on revenue of $4.19 billion.
Shares of Align Technology, Inc. have gained 4.9% over the past month, and currently trade at a forward P/E of 15.04X and a P/CF of 14.4X.
The Medical - Dental Supplies industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CAH and ALGN, even beyond their own solid fundamental situation.
Cardinal Health (CAH - Free Report) closed the most recent trading day at $233.01, moving +1.79% from the previous trading session. This change outpaced the S&P 500's 0.1% loss on the day. Meanwhile, the Dow gained 0.35%, and the Nasdaq, a tech-heavy index, lost 0.43%.
Heading into today, shares of the prescription drug distributor had gained 14.24% over the past month, outpacing the Medical sector's gain of 1.97% and the S&P 500's loss of 1.34%.
Investors will be eagerly watching for the performance of Cardinal Health in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $2.41, marking a 15.87% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $65.61 billion, reflecting a 9.06% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $10.76 per share and revenue of $256.24 billion, indicating changes of +30.58% and +15.12%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Cardinal Health. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Cardinal Health is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, Cardinal Health is currently being traded at a Forward P/E ratio of 21.27. This valuation marks a premium compared to its industry average Forward P/E of 15.58.
We can also see that CAH currently has a PEG ratio of 1.25. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Medical - Dental Supplies industry stood at 1.66 at the close of the market yesterday.
The Medical - Dental Supplies industry is part of the Medical sector. This group has a Zacks Industry Rank of 97, putting it in the top 40% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 21.16; value investors should take notice.
Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.44 to $10.76 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CAH should be on investors' short list.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cardinal Health (CAH - Free Report) .
Cardinal currently has an average brokerage recommendation (ABR) of 1.35, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 17 brokerage firms. An ABR of 1.35 approximates between Strong Buy and Buy.
Of the 17 recommendations that derive the current ABR, 14 are Strong Buy, representing 82.4% of all recommendations.
Brokerage Recommendation Trends for CAH
Check price target & stock forecast for Cardinal here>>>
While the ABR calls for buying Cardinal, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CAH a Good Investment?In terms of earnings estimate revisions for Cardinal, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $10.76.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Cardinal. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Cardinal.
In the latest trading session, Cardinal Health (CAH - Free Report) closed at $221.77, marking a -1.99% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.09%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 1.91%.
Coming into today, shares of the prescription drug distributor had gained 13.58% in the past month. In that same time, the Medical sector gained 3.16%, while the S&P 500 gained 0.29%.
The investment community will be paying close attention to the earnings performance of Cardinal Health in its upcoming release. The company is expected to report EPS of $2.41, up 15.87% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $65.61 billion, indicating a 9.06% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $10.76 per share and a revenue of $256.24 billion, demonstrating changes of +30.58% and +15.12%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Cardinal Health. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Cardinal Health is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, Cardinal Health is currently trading at a Forward P/E ratio of 21.02. This represents a premium compared to its industry average Forward P/E of 15.32.
Investors should also note that CAH has a PEG ratio of 1.24 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Medical - Dental Supplies industry had an average PEG ratio of 1.58 as trading concluded yesterday.
The Medical - Dental Supplies industry is part of the Medical sector. With its current Zacks Industry Rank of 75, this industry ranks in the top 31% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Key Takeaways Cardinal Health shares are up 7.9% YTD after gaining 74% in 2025 on strong execution.CAH raised fiscal 2026 guidance after reporting 35% EPS growth in third-quarter results.Cardinal Health is expanding specialty pharma, advanced therapies and higher-margin services. After delivering a remarkable 74% gain in 2025, shares of Cardinal Health (CAH - Free Report) have climbed another 7.9% year to date, reflecting continued investor confidence in the company’s evolving growth strategy. The rally can be attributed to consistently strong earnings execution, accelerating specialty pharmaceutical expansion and growing contribution from higher-margin healthcare services businesses.
CAH stock has outperformed its closest peers, McKesson (MCK - Free Report) and Cencora, Inc. (COR - Free Report) , so far this year. Over the same period, shares of McKesson have lost 8.5%, while those of Cardinal Health have declined 19.5%.
On its fiscal third-quarter 2026 earnings call, Cardinal Health once again raised earnings guidance after reporting 35% earnings per share (EPS) growth, underscoring management’s confidence in sustained operational momentum. While macro uncertainties and pricing headwinds remain, Cardinal Health is increasingly transforming itself from a traditional pharmaceutical distributor into a diversified healthcare infrastructure company positioned to benefit from specialty medicine growth, advanced therapies and expanding outpatient care trends.
YTD Performance: CAH vs Industry & Peers
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Key Growth Drivers
Specialty Pharmaceutical Business Continues to Power Core Growth: Cardinal Health’s Pharmaceutical and Specialty Solutions business remains its primary growth engine. In the fiscal third quarter, segment revenues rose 11% to $56.1 billion while segment profit jumped 18%, significantly outpacing top-line growth.
Specialty revenues continue to expand above market rates, with management expecting specialty sales to exceed $50 billion in fiscal 2026. Growth is being supported by expanding manufacturer partnerships, specialty distribution and increasing penetration across physician practices.
MSO Platform Expansion Strengthens Competitive Position: The company continues to focus on expanding its physician-focused management services organization (MSO) platform, a key strategy to support long-term growth. Management highlighted continued progress with integrating Solaris into Specialty Alliance, helping expand multispecialty physician offerings.
This strengthens Cardinal Health’s downstream presence with providers while deepening relationships with manufacturers. As specialty drugs become increasingly complex and high-value, the physician networks should help drive durable growth through improved care coordination and service differentiation.
Advanced Therapies and Radiopharma Offer High-Growth Opportunities: Cardinal Health is aggressively positioning itself in next-generation therapies. Its recent 2026 Advanced Therapies report highlighted strong industry momentum toward moving gene and cell therapies into community-based care settings.
Simultaneously, the company significantly expanded Actinium-225 production capacity after already quadrupling output since late 2024. As targeted alpha therapies and radiopharmaceuticals are rapidly emerging as key oncology growth areas, Cardinal Health is building early leadership in this potentially multibillion-dollar market.
Adjacent Businesses Are Becoming Meaningful Profit Drivers: Beyond core pharmaceutical distribution, Cardinal Health’s newer healthcare businesses are scaling rapidly. The company reported 31% revenue growth and 34% profit increase in its “Other Growth Businesses” segment, driven by At-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics.
Particularly noteworthy is theranostics, where Nuclear and Precision Health Solutions delivered more than 30% growth, reflecting rising demand for precision medicine and oncology-focused diagnostics.
Estimate Revision Trend for CAHEstimates for Cardinal Health’s fiscal 2026 earnings have moved up 16.5% to $10.76 per share over the past year, while the same for fiscal 2027 earnings has improved 17.2% to $11.98. The positive estimate revision depicts bullish sentiments for the stock.
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Competition Remains Intense as Rivals Expand Similar Specialty StrategiesCardinal Health continues to face aggressive competition from McKesson and Cencora, both of which are pursuing similar specialty-driven strategies. McKesson delivered 18% adjusted EPS growth in fiscal 2026 while expanding oncology and multispecialty platforms, adding over 570 providers and strengthening AI-enabled supply-chain capabilities.
Cencora continues to invest heavily in specialty pharmaceuticals, oncology-focused MSO platforms and digital infrastructure through its OneOncology acquisition. Compared with peers, Cardinal Health currently stands out for stronger earnings momentum and faster scaling of high-margin businesses like theranostics and precision health, giving it a relative execution advantage entering the second half of 2026.
Valuation OutlookCardinal Health’s improving fundamentals have translated into stronger earnings visibility and guidance. Strong earnings momentum supports the stock’s performance and suggests that Cardinal Health remains attractively positioned relative to its historical growth profile.
CAH’s shares currently trade at a forward 12-month price-to-earnings (P/E) of 18.57X, higher than the industry average of 16.15X.
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Risks and Challenges Could Limit Further UpsideDespite strong momentum, several risks remain. Tariff exposure continues to put pressure on Cardinal Health’s GMPD segment, where profits declined due to adverse tariff impacts despite operational improvements. Growth in GLP-1 drug sales has moderated after prior strength, while Inflation Reduction Act pricing adjustments continue to hurt pharmaceutical revenue growth.
Rising competitive intensity in specialty distribution from McKesson and Cencora could pressure market share gains. Execution risk around scaling newer businesses, such as radiopharma and advanced therapies, also remains an important factor for investors monitoring the stock’s next move.
CAH’s Zacks Rank & Another Key PickCurrently, Cardinal Health has a Zacks Rank #2 (Buy).
West Pharmaceutical (WST - Free Report) is another top-ranked stock from the broader medical space. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical, sporting a Zacks Rank #1 at present, reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
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What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CAH has a Growth Style Score of A, forecasting year-over-year earnings growth of 30.6% for the current fiscal year.
Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.44 to $10.76 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CAH should be on investors' short list.
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Cardinal Health (CAH - Free Report) . CAH is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.
Investors will also notice that CAH has a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CAH's PEG compares to its industry's average PEG of 1.76. Over the last 12 months, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, we should also recognize that CAH has a P/CF ratio of 15.27. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 15.38. Over the past 52 weeks, CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12.
If you're looking for another solid Medical - Dental Supplies value stock, take a look at The Cooper Companies (COO - Free Report) . COO is a Zacks Rank of #2 (Buy) stock with a Value score of A.
Shares of The Cooper Companies currently hold a Forward P/E ratio of 15.59, and its PEG ratio is 1.67. In comparison, its industry sports average P/E and PEG ratios of 15.32 and 1.76.
Over the last 12 months, COO's P/E has been as high as 27.77, as low as 14.68, with a median of 19.67, and its PEG ratio has been as high as 2.45, as low as 1.46, with a median of 1.98.
The Cooper Companies also has a P/B ratio of 1.62 compared to its industry's price-to-book ratio of 4.56. Over the past year, its P/B ratio has been as high as 2.79, as low as 1.53, with a median of 2.02.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Cardinal Health and The Cooper Companies are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CAH and COO feels like a great value stock at the moment.
Key Takeaways Cardinal Health's Pharmaceutical & Specialty revenues rose 19% to about $61B in Q3 fiscal 2026.CAH said specialty revenues grew more than 20%, with fiscal 2026 specialty sales seen above $50B.Cardinal Health highlighted oncology growth above 30% and deeper specialty ecosystem integration. Cardinal Health’s (CAH - Free Report) Pharmaceutical & Specialty Solutions segment continues to be the primary engine of enterprise growth, delivering another standout quarter in the third quarter of fiscal 2026. Segment revenues climbed 19% to approximately $61 billion, while segment profit increased 29%, underscoring the segment’s growing importance to Cardinal Health’s earnings profile. The strength reflects broad-based demand, expanding specialty capabilities and operational leverage across the platform.
The strong performance can be attributed to healthy growth across brand pharmaceuticals, specialty products, and generics, demonstrating the breadth of Cardinal Health’s pharmaceutical distribution model. Management highlights continued strong pharmaceutical demand across categories, with specialty and branded products making particularly strong contributions to profit growth. Generics also remains a positive contributor, supported by stable market dynamics and the company’s Red Oak sourcing partnership.
Specialty remains the most important structural growth driver. Cardinal Health reported more than 20% specialty revenue growth in the third quarter and reiterated expectations for specialty revenues to exceed $50 billion in fiscal 2026, reflecting momentum across both upstream manufacturer partnerships and downstream provider networks. Demand trends remain especially strong in oncology, urology, and other specialty therapies, supported by physician engagement through Specialty Alliance MSOs and expanding biopharma solutions capabilities.
The company is also deepening integration across its specialty ecosystem. The ongoing onboarding of Solaris and GI Alliance distribution volumes, alongside tuck-in acquisitions within Specialty Alliance, is expanding physician reach and reinforcing cross-platform synergies. Management emphasized that oncology alone continued to grow more than 30%, highlighting robust patient demand and increasing market penetration.
Looking ahead, sustainability appears favorable. Positive demographic trends, increasing specialty drug utilization and deeper manufacturer partnerships continue to support demand. While mix shifts and IRA pricing changes may create revenue volatility, Cardinal Health’s strong profit growth suggests the segment’s momentum remains fundamentally intact.
Peer UpdatesThe rising demand for specialty solutions, along with attractive margins, has also led the other two leading pharmaceutical distributors — McKesson (MCK - Free Report) and Cencora (COR - Free Report) — to expand into this space.
McKesson continues to deepen its specialty strategy as a key earnings driver, particularly through its oncology and multispecialty platforms. It reported strong revenue and double-digit EPS growth in the fourth quarter of fiscal 2026, supported by strong demand across oncology services, biopharma solutions and pharmaceutical distribution.
MCK highlighted that its oncology network now includes about 3,400 providers, reflecting the expanding scale of its specialty ecosystem. The company is also integrating assets, such as Florida Cancer Specialists and PRISM Vision, strengthening provider services and specialty drug distribution.
With specialty distribution volumes and provider solutions driving operating profit growth, McKesson’s oncology and multispecialty platform is emerging as a key contributor to its long-term earnings expansion.
Cencora is similarly leaning into specialty pharmaceuticals and MSO expansion to accelerate earnings growth. COR reported 6% adjusted operating income growth and 7.5% adjusted EPS growth in the quarter, driven largely by its U.S. Healthcare Solutions segment and specialty drug demand.
The company recently expanded its MSO footprint through the acquisition of OneOncology, complementing Retina Consultants of America and strengthening its specialty ecosystem. Cencora expects these physician-focused platforms to deepen relationships with biopharma companies and specialty providers.
As specialty innovation and complex therapies grow, Cencora believes these MSO partnerships will enhance distribution volumes, support physicians and create new earnings growth opportunities for it.
CAH’s Price Performance, Valuation and EstimatesShares of CAH have lost 11.2% so far this year compared with the industry’s 12.6% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Cardinal Health trades at a forward price-to-earnings ratio of 15.5, above the industry average. It is also higher than its five-year median of 13.65. CAH carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cardinal Health’s fiscal 2026 earnings implies a 30.1% rise from the year-ago period’s level.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Roughly a year ago, 24/7 Wall St. ran a piece titled Forget UnitedHealth. Cardinal Health Is the Best Healthcare Stock to Buy Right Now, arguing that Cardinal Health (NYSE: CAH | CAH Price Prediction) was the safer healthcare bet while UnitedHealth Group (NYSE: UNH) reeled from a Department of Justice probe, a leadership shake-up, and a 50% drawdown. Twelve months later, the question for a retirement-focused investor is sharper: which one should you actually own today?
The honest answer requires grading the original call and then asking what the next year looks like. We’ll judge both names on past 12-month performance, recent momentum, and forward analyst views.
Round 1: 12-Month Total Return The contrarian trade won. From the original article’s publication on May 29, 2025, through May 11, 2026, UnitedHealth returned 35.2%, climbing from $296.80 to $401.16. Cardinal Health, the recommended pick, returned 21.8%, moving from $153.00 to $186.35. Both produced solid gains, yet the “buy the wreck” trade in UnitedHealth beat the “ride the leader” trade in Cardinal Health by a meaningful margin on a total-return basis.
Cardinal Health delivered solid gains. UnitedHealth simply rebounded harder once CEO Stephen Hemsley’s turnaround took hold. Winner: UnitedHealth.
Round 2: Recent Momentum The trend lines have inverted on shorter windows. UnitedHealth posted a 27.0% gain over the past month and is up 20.9% year-to-date, fueled by a Q1 2026 adjusted EPS of $7.23, versus the $6.61 consensus estimate, and a raised full-year outlook calling for adjusted EPS above $18.25. The medical cost ratio improved 90 basis points to 83.9%, the central data point bears had been hammering.
Cardinal Health has gone the other way. The stock is down 10.7% over the past month and down 6.6% year-to-date, even after Q3 FY26 produced a non-GAAP EPS beat of $3.17 against $2.79. The market punished a 2.09% revenue miss, a 30.27% year-over-year operating income decline, and a $184 million goodwill impairment in Navista and ION. Winner: UnitedHealth.
Round 3: Forward Analyst View Here the script flips. Cardinal Health screens better on the upside scoreboard. The Wall Street consensus target is $245.27, implying material upside, with an analyst mix of three Strong Buy, 12 Buy, two Hold, and zero Sell ratings (88% bullish). The 24/7 Factor target of $231.18 implies 24.0% upside, and management has now raised FY26 non-GAAP EPS guidance to $10.70 to $10.80, or 30% to 31% growth.
UnitedHealth’s setup is tighter. The consensus target is $387.27, which is less than the current share price, and the 24/7 Factor target of $437.34 implies 9.1% upside. Coverage is still positive (82% bullish), but the rally has eaten much of the cushion, and the DOJ Medicare actions and a 965,000-member Medicare Advantage decline remain live overhangs. Winner: Cardinal Health.
The Verdict The original 24/7 Wall St. call to forget UnitedHealth aged poorly on the headline question. UnitedHealth won the trailing 12 months and the past 30 days. Acknowledging that directly matters more than defending the past pick.
For new money today, the decision splits clearly by investor profile. For retirement investors who want larger scale, a heavier dividend (UnitedHealth paid out $2.0 billion in Q1 2026 alone), and exposure to a turnaround already validated by results, UnitedHealth lines up with that profile. Retirement investors with a slightly longer horizon and a tolerance for near-term drawdown will find that Cardinal Health fits the brief. The analyst community is more bullish, the implied upside is wider, EPS growth guidance is faster, and a beta of 0.54 keeps portfolio volatility contained.
On a risk-adjusted basis, the setup currently favors Cardinal Health: UnitedHealth has already completed much of its rebound, while Cardinal Health screens with wider implied upside and faster EPS growth guidance.
Kiplinger’s Personal Finance May 2026 letter makes it clear that if you are looking for yield, the door is wide open across the entire risk spectrum. We are seeing a massive spread, with opportunities ranging from stable 3% municipal bonds to 13% for those willing to get aggressive with business development companies. This is unfolding while the Federal Reserve holds the funds rate steady at 3.75%, even as the war in Iran throws a curveball at the market by hiking inflation expectations and long-term rates.
While the “artificial intelligence fervor” that dominated for years seemed to hit a wall in late 2025, the current income landscape hasn’t missed a beat. Investors are now weighing relatively safe plays, like intermediate-term tax-exempt funds yielding 3.3%, against spicier options like exchange-listed bond snippets yielding 6%. The income is there for the taking, but the real question for 2026 is how long the Middle East conflict lasts and how much risk you are actually willing to stomach to grab those double-digit returns.
This Kiplinger’s May 2026 infographic illustrates the range of available yields, from 3% to 13%, across different investment categories and their associated risk levels, ranging from cash to credit. The 3% Floor: Cash and Short Treasuries The bottom of the risk spectrum is currently a battleground between safety and shrinking purchasing power. While the Federal Reserve holds the funds rate steady at 3.75%, the war in Iran has thrown a curveball, pushing inflation expectations and long-term rates higher. With headline inflation projected at 3% to 4% by the end of 2026, the real yield on standard cash equivalents is effectively a wash.
This narrow margin is the price of principal protection in a market that just weathered a massive geopolitical shock. For those who need more than a “break-even” result, the move is to step slightly out on the risk ladder. Municipal bond funds offering a tax-equivalent 4.3% or mortgage-debt funds yielding 5.4% provide the necessary lift to actually outrun rising costs without diving into the “spicier,” high-risk territory of double-digit yields.
The 4% to 5% Middle: The Treasury Curve and Investment-Grade Dividends The middle of the range is where the curve does most of the work. The 5-year Treasury yields 4.13%, the 10-year offers 4.47%, and the 30-year tops out at 5.02%. TIPS at the 10-year point pay a real yield of 2.00%, which is the inflation-adjusted version of the same trade. The 10Y-2Y spread of 0.48% is positive but compressed, at the 6th percentile over the past year.
Blue-chip dividend equities sit alongside this band rather than above it. Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) pays a yield of 2.26% on its $1.34 quarterly dividend, the 64th consecutive annual increase. Cardinal Health (NYSE:CAH) yields about 1.1%. Both are dividend-growth names, and the income case rests on the compounding of the raise rather than the starting yield.
The 5% to 7% Tier: Financials and Capital Returns Financial-services dividends layered on top of buybacks form the next step up. Morgan Stanley (NYSE:MS) carries a $4.00 annual dividend for a yield near 2.1%, supported by a Q1 2026 ROTCE of 27.1% and $1.75 billion in Q1 buybacks. Charles Schwab (NYSE:SCHW) lifted its quarterly payout 19% to $0.32 per share after Q1 2026 net income rose 30% on client assets of $11.77 trillion. The yield on Schwab is still modest at roughly 1.4%, but the dividend growth rate is the relevant figure for buyers focused on income five years out.
The 7% to 13% Range: Closed-End Funds and Credit The upper band is where structure starts to matter more than the headline yield. Closed-end funds that use leverage and option overlays fall within the 7% to 9% range. Eaton Vance Tax-Advantaged Dividend Income Fund (NYSE:EVT) pays $0.1646 monthly, an annualized $1.9752, for a distribution rate of roughly 7.5% on its $26.27 price. The fund’s emphasis on tax-advantaged dividend income and modest leverage is representative of the CEF segment as a whole.
Yields toward the 13% end of Kiplinger’s range typically come from business development companies, mortgage REITs, leveraged credit funds, and some MLPs. Those vehicles entail credit risk, interest-rate sensitivity, and return-of-capital mechanics that the Treasury bill at the other end of the spectrum does not. The distribution rate quoted on the screen and the total return credited to the account are often different.
The Full Range The income landscape currently ranges from 3% for municipal bond funds to 13% for business development companies. Every jump in yield across this curve is tied to a clear increase in credit, structural, or complexity risk. While the Iran war threw a curveball, pushing inflation expectations and long-term interest rates higher, attractive income opportunities remain available for those willing to navigate the fallout.
The market is still heavily influenced by the duration of the Middle East conflict, but the menu of income plays has stabilized since the initial shock. Investors are choosing between lower-risk paths, such as tax-exempt funds yielding 3.3%, and higher-risk options, such as business development companies that lend to private businesses for double-digit returns.
Ultimately, the strategy depends on a saver’s appetite for potential price swings versus the need for a reliable current yield.
Key Takeaways Cardinal Health is expanding beyond distribution into specialty care and logistics services.CAH's Pharmaceutical & Specialty Solutions unit generated about $61B in quarterly revenues.Cardinal Health's "specialty flywheel" connects providers, manufacturers and patients. Cardinal Health (CAH - Free Report) is increasingly positioning itself as a foundational layer of the U.S. healthcare system, leveraging scale, operational reliability and integrated capabilities to deepen its role across pharmaceutical distribution, specialty care and advanced logistics. Management’s commentary in the third quarter of fiscal 2026 suggests the company is evolving beyond a distributor into a critical healthcare infrastructure partner.
At the center of this positioning is Cardinal Health’s vast distribution network, which supports tens of thousands of healthcare locations across the United States, including hospitals, pharmacies, physician offices and specialty clinics. The company’s Pharmaceutical & Specialty Solutions segment alone contributed approximately $61 billion to quarterly revenues, underscoring the scale and centrality of its operations to healthcare delivery.
Cardinal Health’s influence increasingly spans multiple layers of the care continuum. Beyond traditional pharmaceutical distribution, the company has expanded into specialty drug distribution, physician-facing MSO platforms, biopharma services, logistics and nuclear medicine.
Specialty Alliance networks in oncology, rheumatology and urology deepen provider relationships, while Sonexus hub services and 3PL capabilities support manufacturer commercialization and patient access. Nuclear and Precision Health Solutions further broadens the company’s role in high-value diagnostic and treatment pathways.
Operational reliability has also become a differentiator. Management has emphasized Cardinal Health’s ability to maintain service continuity during periods of industry-wide supply-chain disruption and drug shortages. The majority of its manufacturing facilities are based in the United States, reinforcing its importance as a trusted intermediary within healthcare. This reliability strengthens its relationship with both providers and manufacturers, especially as supply chains become more complex.
Cardinal Health is driving greater integration across healthcare supply chains. Its “specialty flywheel” strategy increasingly connects manufacturers, providers and patients through a unified ecosystem of distribution, access and support services. This integration enhances visibility, improves efficiency and creates cross-segment growth opportunities.
CAH appears to be transitioning from a logistics provider to a strategic backbone of U.S. healthcare infrastructure, with scale and ecosystem integration reinforcing long-term relevance.
Peer UpdatesHims & Hers Health (HIMS - Free Report) is increasingly reshaping U.S. healthcare infrastructure by building a consumer-first, technology-enabled care platform that bypasses many traditional friction points in care delivery. Hims & Hers is expanding access to treatments across weight loss, testosterone, menopause and labs through an integrated ecosystem of providers, pharmacies and AI-enabled tools.
Management emphasized that Hims & Hers now supports nearly 2.6 million subscribers and tens of millions of annual patient touchpoints, using AI, at-home diagnostics and digital care pathways to improve access and personalization. By partnering with pharma companies and broadening GLP-1 access, Hims & Hers is increasingly acting as a scalable digital front door to healthcare.
LifeMD (LFMD - Free Report) is also redefining healthcare infrastructure by creating an integrated virtual care ecosystem that combines telehealth, pharmacy, diagnostics, insurance integration and AI-driven workflows. LifeMD has strong presence with its 50-state affiliated medical group, in-house pharmacy and national lab capabilities, positioning the platform as more than a point-solution telehealth provider.
LFMD is expanding access to weight management, women’s health and chronic care while using AI to improve provider productivity and personalize treatment. With insurance coverage expected to expand to 230 million covered lives, LifeMD is helping shift care delivery toward a more connected, lower-friction and digitally coordinated healthcare infrastructure.
CAH’s Price Performance, Valuation and EstimatesShares of CAH have lost 2.8% so far this year compared with the industry’s 10.3% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Cardinal Health trades at a forward price-to-earnings ratio of 16.93, above the industry average. It is also higher than its five-year median of 13.67. CAH carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cardinal Health’s fiscal 2026 earnings implies a 30.1% rise from the year-ago period’s level.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Cardinal Health (CAH - Free Report) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
While there are numerous reasons why the stock of this prescription drug distributor is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Cardinal is 17.1%, investors should actually focus on the projected growth. The company's EPS is expected to grow 30.1% this year, crushing the industry average, which calls for EPS growth of 7.5%.
Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.
Right now, Cardinal has an S/TA ratio of 4.49, which means that the company gets $4.49 in sales for each dollar in assets. Comparing this to the industry average of 0.66, it can be said that the company is more efficient.
While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And Cardinal looks attractive from a sales growth perspective as well. The company's sales are expected to grow 15.2% this year versus the industry average of 1.9%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Cardinal have been revising upward. The Zacks Consensus Estimate for the current year has surged 4.3% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Cardinal a Zacks Rank #2 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Cardinal is a potential outperformer and a solid choice for growth investors.
Key Takeaways Cardinal Health's specialty and pharma unit posted 11% revenue growth in fiscal Q3 2026.CAH's at-home, theranostics and logistics businesses lifted "Other" revenues 31% in Q3.Cardinal Health raised fiscal 2026 free cash flow guidance to $3.3-$3.7B after strong Q3. Cardinal Health (CAH - Free Report) is well positioned for continued growth, thanks to the expansion of its speciality portfolio. The firm delivered strong fiscal third-quarter results, fueled by robust demand in pharmaceutical distribution and accelerating specialty services. Growth in theranostics, at-home solutions, and logistics businesses, alongside improving performance in the medical segment, continues to strengthen CAH’s long-term earnings outlook.
This Zacks Rank #2 (Buy) company’s shares have lost 2.5% so far this year compared with the industry’s 9.3% decline. The S&P 500 has increased 8.1% during the same time frame.
The leading provider of healthcare services and products has a market capitalization of $46.93 billion. It projects 15.7% growth over the next five years and expects to witness continued improvement in its business going forward. Cardinal Health’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 13.21%.
Image Source: Zacks Investment Research
Let’s delve deeper.
UpsidesStrong Specialty and Pharmaceutical Momentum: Cardinal Health’s Pharmaceutical and Specialty Solutions segment continues to be the company’s primary earnings engine, delivering 11% revenue growth and 18% segment profit growth in the third quarter of fiscal 2026. Growth was fueled by robust pharmaceutical demand across specialty, generics and consumer health, with specialty revenues growing more than 20% and oncology expanding over 30%.
Management reiterated expectations for specialty revenues to exceed $50 billion in fiscal 2026, supported by MSO expansion, biopharma solutions, and the Solaris integration. This increasing exposure to higher-margin specialty ecosystems strengthens Cardinal Health’s long-term earnings profile while reducing its dependence on traditional low-margin drug distribution.
Other Growth Businesses Hold Potential: Cardinal Health’s Other growth businesses — At-Home Solutions, Nuclear and Precision Health Solutions (“NPHS”), and OptiFreight Logistics — are becoming increasingly important contributors to earnings diversification. In the fiscal third quarter, revenues from these businesses surged 31% to $1.7 billion, while profit increased 34% to $179 million, supported by secular trends, such as home-based care, theranostics and logistics optimization.
Particularly notable was theranostics growth of more than 30% and continued integration progress at Advanced Diabetes Supply (“ADS”), which added nearly 500,000 patients. These businesses carry structurally stronger growth and margin profiles than traditional distribution, providing CAH with multiple long-term expansion drivers.
Strong Cash Flow and Disciplined Capital Allocation: Cardinal Health generated $1.7 billion in adjusted free cash flow in the third quarter, prompting management to raise fiscal 2026 free cash flow guidance to $3.3-$3.7 billion.
The company has also repurchased $1 billion worth of shares year to date, exceeding its baseline target while reducing leverage to 3.0x, comfortably within its target range. Strong cash generation provides Cardinal Health with the flexibility to fund specialty expansion, invest in automation and infrastructure, pursue disciplined acquisitions, and return capital to shareholders simultaneously. This disciplined capital allocation framework strengthens financial resilience and enhances long-term earnings accretion potential.
Improving Operational Execution and Infrastructure Investments: Cardinal Health continues to strengthen operational efficiency through automation, technology upgrades and supply-chain investments, which management said helped maintain record-high service levels despite heightened winter storms and global supply disruptions.
The company is modernizing its distribution infrastructure, expanding capacity, and simplifying operations within the GMPD segment while maintaining strong customer retention. Investments in technology and logistics are also supporting higher productivity and service quality, particularly across specialty and at-home care businesses. These operational improvements should enhance scalability, strengthen customer relationships, and support sustained margin resilience as volumes continue to grow.
DownsidesIRA Pricing Changes and Mix Shifts: Cardinal Health’s Pharma revenue growth faces rising complexity due to Inflation Reduction Act (IRA)-related WAC pricing adjustments, which reduced revenue growth by approximately 6 percentage points in the fiscal third quarter, effectively offsetting GLP-1 contribution.
While management emphasized that contract economics remain protected through fee renegotiations, lower branded drug prices can still suppress reported top-line growth. The shift from branded drugs to generics following loss-of-exclusivity events, though favorable for profitability, can limit revenue visibility. Consequently, robust demand may not be reflected proportionally in reported sales growth for Cardinal Health.
GMPD Segment Recovery Remains Fragile: Cardinal Health’s Global Medical Products and Distribution (“GMPD”) segment continues to face execution risk despite improvement initiatives. Segment revenues were flat year over year, while profit declined to $25 million, largely due to tariff-related headwinds and lower distribution volumes.
Management cited softness stemming from lost customer contracts and weaker respiratory and laboratory demand, though branded products remained resilient. While simplification initiatives and supply-chain improvements continue to progress, profitability remains vulnerable to external pressures such as tariffs, fuel costs, and commodity inflation, which could delay margin recovery in this segment for Cardinal Health.
Estimate TrendCardinal Health has been witnessing an improving estimate revision trend for 2026. Over the past 30 days, the Zacks Consensus Estimate for earnings per share (EPS) has improved 3.9% to $10.72.
The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is pegged at $65.85 billion, indicating a 9.5% improvement from the year-ago reported number. The Zacks Consensus Estimate for EPS is pinned at $2.40, implying a year-over-year gain of 15.4%.
Other Stocks to ConsiderSome other top-ranked stocks from the same medical industry are Pacific Biosciences of California (PACB - Free Report) , Globus Medical (GMED - Free Report) and Biodesix (BDSX - Free Report) .
Pacific Biosciences of California, currently carrying a Zacks Rank #2, reported a first-quarter 2026 adjusted loss per share of 12 cents, which surpassed the Zacks Consensus Estimate by 29.4%. Revenues of $37 million missed the Zacks Consensus Estimate by 9.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PACB’s earnings are estimated to decline at a rate of 12.2% against the industry’s 16.9% growth in 2027. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 29.76%.
Globus Medical, carrying a Zacks Rank #2 at present, reported first-quarter 2026 adjusted EPS of $1.12, which outpaced the Zacks Consensus Estimate by 21.7%. Revenues of $760 million surpassed the Zacks Consensus Estimate by 4%.
GMED has an estimated long-term earnings growth rate of 10.2% compared with the industry’s 12.6% rise. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 26.26%.
Biodesix, currently carrying a Zacks Rank of 2, reported a first-quarter 2026 adjusted loss per share of 81 cents, which beat the Zacks Consensus Estimate by 35.71%. Revenues of $26 million beat the Zacks Consensus Estimate by 12.3%.
BDSX has an estimated earnings growth rate of 36% for 2026 compared with the industry’s 13.4% rise. The company beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 25.56%.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Medical stock. CAH has a Momentum Style Score of B, and shares are up 0.4% over the past four weeks.
Nine analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.41 to $10.72 per share. CAH also boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CAH should be on investors' short list.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cardinal Health (CAH - Free Report) .
Cardinal currently has an average brokerage recommendation (ABR) of 1.24, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 17 brokerage firms. An ABR of 1.24 approximates between Strong Buy and Buy.
Of the 17 recommendations that derive the current ABR, 15 are Strong Buy, representing 88.2% of all recommendations.
Brokerage Recommendation Trends for CAH
Check price target & stock forecast for Cardinal here>>>
The ABR suggests buying Cardinal, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in CAH?In terms of earnings estimate revisions for Cardinal, the Zacks Consensus Estimate for the current year has increased 4.3% over the past month to $10.72.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Cardinal. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Cardinal may serve as a useful guide for investors.
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Cardinal Health (CAH - Free Report) . CAH is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 15.48 right now. For comparison, its industry sports an average P/E of 15.74. Over the past 52 weeks, CAH's Forward P/E has been as high as 20.15 and as low as 13.69, with a median of 15.30.
CAH is also sporting a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CAH's industry currently sports an average PEG of 1.81. Over the past 52 weeks, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, our model also underscores that CAH has a P/CF ratio of 15.27. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.55. Within the past 12 months, CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12.
These are just a handful of the figures considered in Cardinal Health's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CAH is an impressive value stock right now.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. CAH has a Growth Style Score of B, forecasting year-over-year earnings growth of 30.1% for the current fiscal year.
Nine analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.41 to $10.72 per share. CAH also boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CAH should be on investors' short list.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Cardinal Health (CAH - Free Report) Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.
CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 18.36; value investors should take notice.
For fiscal 2026, nine analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.41 to $10.72 per share. CAH boasts an average earnings surprise of +10.3%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, CAH should be on investors' short list.
Cardinal Health (CAH - Free Report) closed the last trading session at $196.8, gaining 0.8% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $247.47 indicates a 25.8% upside potential.
The average comprises 15 short-term price targets ranging from a low of $215.00 to a high of $275.00, with a standard deviation of $15.99. While the lowest estimate indicates an increase of 9.3% from the current price level, the most optimistic estimate points to a 39.7% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's because the ability and unbiasedness of analysts in setting price targets have long been questionable.
But, for CAH, an impressive average price target is not the only indicator of a potential upside. Strong agreement among analysts about the company's ability to report better earnings than they predicted earlier strengthens this view. While a positive trend in earnings estimate revisions doesn't gauge how much a stock could gain, it has proven to be powerful in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Why CAH Could Witness a Solid UpsideAnalysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason to expect an upside in the stock. That's because empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 4.3%, as nine estimates have moved higher compared to no negative revision.
Moreover, CAH currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much CAH could gain, the direction of price movement it implies does appear to be a good guide.
On June 04, 2026, Cardinal Health Inc CAH shares rose 3.0%, bringing the current price to $201.74. The stock has traded within a 52-week range of $137.75 to $233.60. This recent uptick is noteworthy in the context of its year-to-date performance, which shows a decline of 1.4%. However, over the past year, the stock has appreciated by 32.4%.
GF Value™ verdict: Shares are trading at $201.74, which is 43.6% above the GF Value™ estimate of $140.52, indicating that the stock is overvalued.GF Score™: The stock has a score of 85/100, suggesting strong overall performance metrics.Notable signal: There have been no insider transactions in the last 3 months, indicating stable insider sentiment. Is CAH Overvalued or Undervalued? According to the GF Value™, Cardinal Health Inc CAH is currently significantly overvalued. The current share price of $201.74 exceeds the GF Value™ estimate of $140.52 by 43.6%. This disparity highlights a potential risk for investors, as the stock's price may not be sustainable if it does not align with its intrinsic value. A margin of safety is essential for any investment, and the current valuation suggests that the stock may be trading well above a reasonable entry point.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Since CAH is classified as significantly overvalued, potential investors might want to exercise caution and look for more favorable pricing before considering a position in the company.
How Does CAH's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 30.9x 29.2x Forward P/E 16.8x N/A Currently, Cardinal Health's P/E (TTM) ratio is 30.9x, which is 6% above its 5-year median P/E of 29.2x. This indicates that the stock is trading above its historical valuation metrics. When comparing this P/E analysis to the GF Value™ verdict, it agrees that CAH is overvalued, reinforcing the view that investors should be cautious regarding the stock's current pricing.
What Does CAH's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021).
Metric Rating GF Score™ 85 Financial Strength 7/10 Profitability 7/10 Growth 8/10 Valuation 5/10 Momentum 8/10 The GF Score™ of 85/100 indicates that Cardinal Health has strong performance across multiple metrics. The strongest areas are Growth and Momentum, both rated at 8/10, suggesting that the company has demonstrated a robust ability to expand and maintain positive price movements. However, the Valuation score of 5/10 indicates that the stock's current valuation may not be justified based on its financial performance metrics.
What Are Insiders Doing with CAH Stock? In the last three months, there have been no insider transactions for Cardinal Health Inc CAH . This lack of activity could suggest that insiders are not currently making significant moves, which may imply stability in their outlook on the company's performance. However, it is also essential to consider that active insider buying or selling could provide additional insights into the company's future prospects.
What This Means for Investors Based on the GF Value™ analysis, Cardinal Health Inc CAH is currently considered overvalued. With the stock trading significantly above its intrinsic value, potential investors may want to proceed with caution until a more favorable entry point arises.
For the complete analysis, visit the Cardinal Health Inc CAH stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is CAH's GF Score™?
The GF Score™ for Cardinal Health Inc is 85/100, indicating strong overall performance metrics and the potential for high long-term returns.
Is CAH overvalued or undervalued?
Cardinal Health Inc is currently considered overvalued, with the share price exceeding the GF Value™ estimate by 43.6%.
What is CAH's P/E ratio?
CAH's P/E (TTM) ratio is 30.9x, which is above its historical 5-year median of 29.2x, suggesting that the stock is trading at a higher valuation than in the past.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Cardinal Health (CAH - Free Report) is a stock many investors are watching right now. CAH is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 15.48. This compares to its industry's average Forward P/E of 16.28. Over the past 52 weeks, CAH's Forward P/E has been as high as 20.15 and as low as 13.69, with a median of 15.30.
CAH is also sporting a PEG ratio of 1.24. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CAH's PEG compares to its industry's average PEG of 1.82. Over the past 52 weeks, CAH's PEG has been as high as 1.88 and as low as 1.22, with a median of 1.49.
Finally, our model also underscores that CAH has a P/CF ratio of 15.27. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CAH's P/CF compares to its industry's average P/CF of 17.21. Within the past 12 months, CAH's P/CF has been as high as 17.47 and as low as 12.96, with a median of 15.12.
These are only a few of the key metrics included in Cardinal Health's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, CAH looks like an impressive value stock at the moment.
