A Look at Cardinal Health’s Valuation as New Innovations and Automation Strategy Take Shape

Cardinal Health (CAH) is shaking things up with two fresh announcements: the international rollout of its Kendall SCD SmartFlow Compression System and a new automated distribution facility in Indianapolis. Both moves highlight a broader strategy shift that emphasizes innovation and efficiency.

See our latest analysis for Cardinal Health.

Cardinal Health’s push into smart medical devices and automation comes during a year of strong momentum for investors. The company’s 32.9% share price return so far in 2025 far outpaces the broader market, while its 41.4% one-year total shareholder return and a striking 265% total return over five years signal sustained, long-term outperformance. Recent moves, such as the international product launch and the future-ready Indianapolis facility, have amplified optimism around both future growth and the emerging value story behind CAH.

If these healthcare innovations have sparked your curiosity, there are plenty of other medical sector standouts worth a look. See the full lineup with our See the full list for free.

But with shares near all-time highs and robust returns already logged, the question is whether Cardinal Health is still undervalued and primed for further upside, or if investors are paying a premium for anticipated growth ahead.

Most Popular Narrative: 13% Undervalued

Cardinal Health’s last close of $156.88 is noticeably below the fair value of $180.46 reflected in the most widely followed narrative. Here’s what’s driving that valuation gap, and why there’s debate about whether this premium is truly justified.

The company's investments in automation, advanced supply chain technology, and new distribution centers are expected to deliver long-term operational efficiencies and cost savings, supporting improved net margins and free cash flow as healthcare shifts to value-based and outpatient models.

Read the complete narrative.

Want to know the profit and growth math justifying this higher price? The real story hinges on surprisingly optimistic margin gains and a future earnings trajectory that few expect in this sector. Find out what trends and financial projections this narrative is betting big on, as the details may challenge your expectations.

Result: Fair Value of $180.46 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, increased regulatory scrutiny and heightened competition could compress margins and challenge the bullish growth narrative for Cardinal Health in the future.

Find out about the key risks to this Cardinal Health narrative.

Build Your Own Cardinal Health Narrative

If you see the story differently or want to dig into the numbers yourself, you can build your own take on Cardinal Health in just a few minutes. Do it your way

A great starting point for your Cardinal Health research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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