A Look at Cardinal Health's Valuation Following Major Expansion of At-Home Solutions Distribution Network

Cardinal Health (CAH) is turning heads this week following its announcement of a major expansion for its at-Home Solutions business. The healthcare giant just opened a new high-tech distribution center in Fort Worth, Texas, and plans to break ground on another in Sacramento, California, later this fiscal year. These moves represent a clear push to boost the company’s delivery infrastructure and ramp up support for chronic care needs across the United States.

This expansion demonstrates Cardinal Health’s intent to seize growth opportunities in the evolving medical supply landscape. Over the past year, the company’s stock has climbed 37%, building significant momentum even as it digested prior investments in distribution technology and network upgrades. While shares have cooled a bit in recent months, the longer-term returns remain impressive, which is a stark contrast to the more subdued performance of many healthcare peers.

With this expansion accelerating operations and the stock chart trending higher, the big question is whether Cardinal Health is still undervalued or if investors have already bid up the price in anticipation of future growth.

Most Popular Narrative: 15.6% Undervalued

The most widely followed narrative views Cardinal Health as significantly undervalued, projecting meaningful upside based on future earnings growth, margin expansion, and robust sector catalysts.

Strategic expansion into higher-margin specialty businesses, including acquisitions in multi-specialty MSO platforms (e.g., Solaris Health), specialty pharma, and biopharma solutions, should accelerate long-term profit growth, diversify revenue streams, and enhance overall earnings resilience. The strong performance and continued investment in other growth businesses such as at-Home Solutions, Nuclear and Precision Health, and OptiFreight Logistics aligns with the growing trend of outpatient and home healthcare. This underpins diversified revenue growth and supports margin expansion.

What is the secret ingredient behind this bold valuation call? The narrative hints at exceptional profit growth, ambitious future operating margins, and a long-term outlook that could reshape how Cardinal Health is valued in the market. Wondering whether the company’s current market price truly reflects the anticipated leap in profitability and future earnings power? Unlock the full narrative to discover which numbers and assumptions are fueling this view of Cardinal Health’s value: are the analysts right, or are they reaching?

Result: Fair Value of $180.46 (UNDERVALUED)

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

However, rising regulatory scrutiny and intense competition could constrain Cardinal Health’s margins, which may challenge the optimistic scenario that analysts currently favor.

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

Another View: Multiples Tell a Different Story

Looking at Cardinal Health through the lens of its price-to-earnings ratio reveals a different perspective. This method suggests the stock is more expensive compared to the industry average, which raises questions about how much growth is already priced in.

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Cardinal Health to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Cardinal Health Narrative

If you have a different perspective or want to dig into the numbers yourself, you can build your personal investment view in just a few minutes using 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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