📊 CAH Key Takeaways
Investment Thesis
Cardinal Health exhibits concerning financial deterioration with negative stockholders' equity of $2.9B, indicating the company is technically insolvent from an equity perspective. Despite maintaining reasonable operational cash flow of $1.7B, the combination of razor-thin margins (0.7% net margin), declining revenue (-1.9% YoY), and severely strained liquidity ratios (0.91x current ratio) suggests structural operational challenges in the wholesale drug distribution sector. The negative equity position raises substantial questions about long-term sustainability and financial flexibility.
CAH Strengths
- Positive operating cash flow of $1.7B demonstrates ability to generate cash from operations
- Solid free cash flow of $1.4B after capex provides some financial cushion for debt service
- Interest coverage ratio of 8.2x indicates current debt obligations are manageable from an operational standpoint
- Maintains $2.8B in cash reserves providing short-term liquidity buffer
CAH Risks
- Negative stockholders' equity of -$2.9B signals the company is technically insolvent and equity investors have negative book value
- Liquidity crisis indicators: current ratio of 0.91x and quick ratio of 0.44x both below safe thresholds, suggesting potential working capital stress
- Revenue declining 1.9% YoY with extremely thin net margins of 0.7%, leaving minimal operational flexibility or cushion for disruptions
- High long-term debt of $8.3B relative to equity base creates refinancing risk and limits financial flexibility
- Structural profitability challenges with gross margin of only 3.6% in a capital-intensive wholesale distribution business
Key Metrics to Watch
- Stockholders' equity trend - critical to monitor if company can return to positive equity or if losses continue
- Revenue growth stabilization - must reverse negative trend to demonstrate business stability
- Operating cash flow sustainability - any decline would exacerbate liquidity concerns
- Current ratio and working capital position - deterioration would indicate imminent liquidity crisis
- Debt refinancing ability and covenant compliance - given negative equity, lender willingness to extend credit becomes paramount
CAH Financial Metrics
💡 AI Analyst Insight
The relatively thin 1.1% FCF margin may limit capital allocation flexibility. The current ratio below 1.0x warrants monitoring of short-term liquidity.
CAH Profitability Ratios
CAH vs Default Sector
How CARDINAL HEALTH INC compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CAH Balance Sheet & Liquidity
CAH 5-Year Financial Trend
5-Year Trend Summary: CARDINAL HEALTH INC's revenue has grown significantly by 40% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.26 reflects profitable operations.
CAH Growth Metrics (YoY)
CAH Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $55.3B | $400.0M | N/A |
| Q1 2026 | $52.3B | $416.0M | $1.70 |
| Q3 2025 | $54.9B | $261.0M | N/A |
| Q2 2025 | $55.3B | $356.0M | N/A |
| Q1 2025 | $52.3B | -$12.0M | $-0.05 |
| Q3 2024 | $50.5B | $258.0M | N/A |
| Q2 2024 | $51.5B | -$20.0M | N/A |
| Q1 2024 | $49.6B | $5.0M | $0.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CAH Capital Allocation
CAH SEC Filings
Access official SEC EDGAR filings for CARDINAL HEALTH INC (CIK: 0000721371)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CAH
What is the AI rating for CAH?
CARDINAL HEALTH INC (CAH) has an AI rating of SELL with 75% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CAH's key strengths?
Positive operating cash flow of $1.7B demonstrates ability to generate cash from operations. Solid free cash flow of $1.4B after capex provides some financial cushion for debt service.
What are the risks of investing in CAH?
Negative stockholders' equity of -$2.9B signals the company is technically insolvent and equity investors have negative book value. Liquidity crisis indicators: current ratio of 0.91x and quick ratio of 0.44x both below safe thresholds, suggesting potential working capital stress.
What is CAH's revenue and growth?
CARDINAL HEALTH INC reported revenue of $129.6B.
Does CAH pay dividends?
CARDINAL HEALTH INC pays dividends, with $251.0M distributed to shareholders in the trailing twelve months.
Where can I find CAH SEC filings?
Official SEC filings for CARDINAL HEALTH INC (CIK: 0000721371) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CAH's EPS?
CARDINAL HEALTH INC has a diluted EPS of $1.88.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.