Cardinal Health, Inc. Fundamental Analysis (NYSE: CAH)
Cardinal Health, Inc. (NYSE: CAH) shows weak financial fundamentals with a PE ratio of 31.69, profit margin of 0.67%, and ROE of -59.73%. The company generates $252.3B in annual revenue with weak year-over-year growth of -1.87%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 12.8/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze CAH's fundamental strength across five key dimensions:
Efficiency Score
WeakCAH struggles to generate sufficient returns from assets.
Valuation Score
WeakCAH trades at a premium to fair value.
Growth Score
ModerateCAH shows steady but slowing expansion.
Financial Health Score
ModerateCAH shows balanced financial health with some risks.
Profitability Score
WeakCAH struggles to sustain strong margins.
Key Financial Metrics
Is CAH Expensive or Cheap?
P/E Ratio
CAH trades at 31.69 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CAH's PEG of 2.56 indicates potential overvaluation.
Price to Book
The market values Cardinal Health, Inc. at -18.86 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 14.05 times EBITDA. This signals the market has high growth expectations.
How Well Does CAH Make Money?
Net Profit Margin
For every $100 in sales, Cardinal Health, Inc. keeps $0.67 as profit after all expenses.
Operating Margin
Core operations generate 1.03 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-59.73 in profit for every $100 of shareholder equity.
ROA
Cardinal Health, Inc. generates $2.99 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Cardinal Health, Inc. generates limited operating cash flow of $5.13B, signaling weaker underlying cash strength.
Free Cash Flow
Cardinal Health, Inc. generates weak or negative free cash flow of $4.49B, restricting financial flexibility.
FCF Per Share
Each share generates $19.17 in free cash annually.
FCF Yield
CAH converts 8.40% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
31.69
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.56
vs 25 benchmark
P/B Ratio
Price to book value ratio
-18.86
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.21
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-3.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.88
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.60
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How CAH Stacks Against Its Sector Peers
| Metric | CAH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 31.69 | 31.19 | Neutral |
| ROE | -59.73% | 447.00% | Weak |
| Net Margin | 0.67% | 21592.00% | Weak |
| Debt/Equity | -3.45 | 0.54 | Strong (Low Leverage) |
| Current Ratio | 0.88 | 5.66 | Weak Liquidity |
| ROA | 2.99% | -52.00% (disorted) | Weak |
CAH outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Cardinal Health, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
76.96%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
151.39%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
48.68%
Industry Style: Defensive, Growth, Innovation
High Growth