Is Cardinal Health’s 48% Surge in 2025 Worth the Current Valuation? Here’s What You Need to Know!

Are you thinking about whether to buy, hold, or sell Cardinal Health stock? You’re not alone! Just look at its impressive performance. The stock jumped 48.1% in the past year and an astounding 301.6% over five years. So far this year, it’s up by 37.2%. Clearly, there’s more happening than just luck.

Recently, Cardinal Health saw a weekly gain of 3.5%, following a 4.7% rise for the month. This growth is fueled by increased optimism about its pharmaceutical distribution business and the changing landscape in healthcare. The company’s strategic partnerships and initiatives show it’s ready to adapt, signaling potential for both risk and opportunity.

Now, let’s dive into valuation. Our score shows Cardinal Health at 4 out of 6, suggesting the stock might be undervalued. But assessing true value requires a closer look at various metrics.

A Discounted Cash Flow (DCF) model helps to estimate a company’s value by analyzing its future cash flows. For Cardinal Health, recent data reveals it generated $1.87 billion in Free Cash Flow (FCF) last year. Analysts project steady growth, forecasting FCF could rise to $3.03 billion by 2026 and even reach $5.52 billion by 2030. This long-term view can provide valuable insights for investors.

Based on these projections, the intrinsic value is approximately $584.46 per share, meaning the current price could be about 72.3% lower than its true worth. This could indicate a significant opportunity for investors who see potential in Cardinal Health’s future cash flows.

When we talk about valuation, the Price-to-Earnings (P/E) ratio is essential. Currently, Cardinal Health’s P/E ratio is 24.6, slightly above the healthcare industry average of 21.6. This number becomes more meaningful when compared with peers; it’s close to the average of similar companies at 25.6. Simply Wall St’s unique “Fair Ratio,” which is 25.2 for Cardinal Health, offers a more comprehensive view. It factors in earnings growth, profit margin, company size, and risks, giving investors a deeper understanding.

The P/E ratio provides a snapshot, but some investors believe the future holds even more promise for Cardinal Health. Opinions vary: While one group cites the benefits of automation and pharmaceutical growth justifying a fair value as high as $203, another focuses on regulatory challenges, estimating a more conservative value of $150. This variance highlights the importance of individual narratives in stock valuation.

With changes in the healthcare industry and growing competition, understanding how to assess Cardinal Health can be tricky. Many investors today are engaging in discussions on social media platforms about stock performances, and it’s essential to follow these conversations. They provide real-time insights into public sentiment and professional opinions, shaping a better understanding of the stock’s potential.

Whether you’re considering buying, holding, or selling, diving deeper into these metrics and discussions can provide clarity. Cardinal Health shows potential for growth, but continuous monitoring and understanding the broader market trends will help you make the best decision.

For more detailed analyses and expert perspectives, you can explore resources like Bloomberg and CNBC, which offer up-to-date market insights that could inform your decisions.

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Cardinal Health, DCF, Cash Flow