We came across a bullish thesis on Cardinal Health, Inc. on X.com by @MoneyShow. In this article, we will summarize the bulls’ thesis on CAH. Cardinal Health, Inc.’s share was trading at $226.18 as of February 25th. CAH’s trailing and forward P/E were 24.57 and 16.92, respectively according to Yahoo Finance.
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Cardinal Health, Inc. operates as a healthcare services and products company in the United States and internationally. CAH continues to demonstrate resilience and steady growth within the healthcare sector, driven by strong demand and operational efficiency. The company operates through two main divisions: Pharmaceutical and Specialty Solutions, and Global Medical Products and Distribution.
Its Pharmaceutical and Specialty Solutions segment delivers tailored solutions to hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients at home, distributing branded and generic pharmaceuticals, specialty drugs, and over-the-counter healthcare products.
Meanwhile, the Global Medical Products and Distribution division supports pharmaceutical manufacturers and healthcare providers with specialty pharmaceutical services, pharmacy management for hospitals, community health center pharmacies, and repackaging of generic and over-the-counter products.
In its latest quarter, CAH reported revenue of $64 billion, a 22.4% increase from $52.3 billion a year ago, alongside operating earnings of $611 million, or $2.55 per share, up 35.6% from $460 million, or $1.88 per share. These results significantly exceeded analyst expectations of $58.6 billion in revenue and $2.21 per share in earnings, representing an 8.4% revenue surprise and a 15.4% earnings beat.
Positive analyst sentiment has also increased, with consensus earnings estimates rising 4.3% over the past three months, signaling potential for continued upside. With disciplined execution, a defensive position in healthcare, and strong operational performance, Cardinal Health presents a compelling investment opportunity. The combination of robust revenue growth, substantial earnings outperformance, and favorable analyst revisions reinforces the case for CAH as a buy, offering both stability and potential upside in the healthcare services space.
Previously, we covered a bullish thesis on Thermo Fisher Scientific Inc. (TMO) by Kontra in October 2024, which highlighted its leading position in life sciences tools, diversified segments, and quality compounding potential. TMO’s stock price has depreciated by 14.62% since our coverage. @MoneyShow shares a similar view but emphasizes Cardinal Health, Inc.’s (CAH) defensive positioning, operational efficiency, and strong revenue and earnings growth, highlighting steady, resilient performance in healthcare services.
Cardinal Health, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held CAH at the end of the third quarter which was 59 in the previous quarter. While we acknowledge the risk and potential of CAH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CAH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
