Cardinal Health’s fourth quarter was marked by robust top-line and profit growth, outpacing Wall Street expectations and prompting a positive market reaction. Management credited strong demand and execution in its pharmaceutical and specialty solutions segment as primary drivers, with CEO Jason Hollar noting, “Our strategic focus on specialty is delivering tangible results.” The company also cited double-digit profit growth across all five operating segments, highlighting the balanced performance of its diversified portfolio. Additional momentum came from recent acquisitions and ongoing operational improvements within the Global Medical Products and Distribution (GNPD) segment, according to CFO Aaron Alt.
Is now the time to buy CAH? Find out in our full research report (it’s free for active Edge members).
Cardinal Health (CAH) Q4 CY2025 Highlights:
- Revenue: $65.63 billion vs analyst estimates of $64.85 billion (18.8% year-on-year growth, 1.2% beat)
- Adjusted EPS: $2.63 vs analyst estimates of $2.37 (11.2% beat)
- Adjusted EBITDA: $979.3 million vs analyst estimates of $928.3 million (1.5% margin, 5.5% beat)
- Management raised its full-year Adjusted EPS guidance to $10.25 at the midpoint, a 5.1% increase
- Operating Margin: 1.1%, in line with the same quarter last year
- Market Capitalization: $52.77 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cardinal Health’s Q4 Earnings Call
- Erin Wright (Morgan Stanley) asked for a breakdown of profit performance in Pharma Solutions and organic versus inorganic growth. CEO Jason Hollar explained that strong core growth, especially in specialty, drove results, with M&A contributing about 8% to annual growth.
- Elizabeth Anderson (Evercore ISI) questioned the drivers behind outperformance in the “other” segment. Hollar said all three sub-segments—at-home, nuclear, and Optifreight—showed strong organic growth, with the ADS acquisition performing slightly ahead of expectations.
- Eric Percher (Nephron Research) inquired about capital allocation priorities and M&A flexibility. CFO Aaron Alt emphasized achieving targeted leverage and flexibility for future investments, while Hollar stated that the strategy is not predicated on significant M&A but will focus on core growth and smaller deals.
- George Hill (Deutsche Bank) asked about the impact of manufacturer price decreases on revenue and margins. Hollar stated that revenue may be affected by lower drug prices, but margin stability is preserved through contractual cost adjustments with manufacturers.
- Steven Baxter (Wells Fargo) sought insight into the evolving GLP-1 market and its impact on earnings. Hollar responded that while GLP-1s drive revenue growth, profitability contributions remain modest, and the company does not expect oral GLP-1s to materially change this dynamic in the near term.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will closely monitor (1) the performance of specialty and biopharma solutions, including new contract wins and integration of Solaris Health, (2) GNPD’s execution of its improvement plan and the sustainability of operational gains, and (3) growth trajectories in at-home solutions, nuclear health, and logistics. These markers will be critical in assessing whether Cardinal Health can sustain its momentum amid evolving industry dynamics.
Cardinal Health currently trades at $224.35, up from $206.85 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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