Cardinal Health’s stock has surged recently, hitting a 52-week high, raising questions about its future performance
Columbus: Cardinal Health has been on a roll lately, with its stock climbing 8.6% in just a month. It recently hit a new high of $127.08, which is pretty impressive. Since the start of the year, the stock has gained 7.4%, while the broader medical sector has dipped by 3.8%.
So, what’s fueling this rise? Well, Cardinal has a solid track record of beating earnings expectations. In its latest report, it posted earnings of $1.88 per share, surpassing the estimate of $1.64. Plus, it also beat revenue expectations by nearly 2%.
Looking ahead, analysts expect Cardinal to earn $7.82 per share this fiscal year, with revenues hitting $219.02 billion. Next year, they predict earnings will jump to $8.72 per share on $238.21 billion in revenue, which is a nice increase.
Even though the stock is at a high, it’s worth checking out its valuation metrics. Cardinal has a Value Score of A, which is great. Its Growth and Momentum Scores are C, leading to an overall VGM Score of A. This suggests it’s a solid pick for value investors.
When it comes to valuation, Cardinal trades at 16.2 times its earnings estimates, which is lower than the industry average of 18.2. Its cash flow ratio is also more favorable compared to its peers.
Cardinal currently holds a Zacks Rank of #2, which is a “Buy” rating. This is due to rising earnings estimates, making it a good option for investors looking for potential gains.
In comparison to its competitors, Cardinal still looks like a strong choice. Merit Medical Systems, for instance, also has a Zacks Rank of #2 and has shown solid earnings growth. They recently beat earnings estimates by 7.5% and are expected to post earnings of $3.73 per share this year.
Overall, the Medical – Dental Supplies industry is performing well, and both Cardinal and Merit seem to be benefiting from positive trends.
