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Cardinal Health - AI Stock Analysis

Analysis generated July 23, 2024

Cardinal Health, Inc. is a renowned healthcare services and products company. The firm operates globally, providing solutions that assist hospitals, pharmacies, and other healthcare providers in enhancing their supply chain operations. With a rich history and a diverse portfolio, Cardinal Health plays a critical role in the healthcare ecosystem, making it a company of substantial interest among investors.

Fundamental Analysis

For the last quarter, Cardinal Health reported revenue of $54.9 billion, an 8.76% increase compared to the same quarter last year. This year-over-year growth is a positive sign that the company is expanding its business. However, it is worth noting that this revenue figure represents a 4.41% decrease from the previous quarter, indicating potential short-term challenges.

Net income for the last quarter stood at $258 million, reflecting a concerning 26.91% decline compared to the previous quarter. Compared to the same quarter last year, net income is down by 25.22%. This trend might suggest operational inefficiencies or rising costs that are impacting profitability.

EBITDA for the last quarter was $437 million, down 21.96% from the previous quarter and 31.61% from the same quarter last year. This steep decline in EBITDA could signal underlying problems in the company's core operations, potentially affecting future earnings.

The Price-to-Earnings (P/E) ratio currently stands at 42.05. A high P/E ratio often indicates that a stock may be overvalued, highlighting a bearish outlook. Investors should be cautious as the high P/E suggests that the stock is expensive relative to the company's earnings.

Technical Analysis

Today's stock price for Cardinal Health is $95.85. Although this represents a 7.92% decrease over the past month, it is essential to note the broader context of a 5.12% increase over the past year, indicating a long-term bullish trend.

The Simple Moving Average (SMA) for the last 10 days (SMA10) is currently 95.09 compared to a previous SMA10 of 94.91. This suggests a potential upward trend in price movement, which may attract short-term traders.

The Relative Strength Index (RSI) is at 45.4, a neutral condition. An RSI below 30 generally indicates a stock is oversold, while an RSI above 70 signals overbought conditions. The neutral RSI suggests that the stock is neither oversold nor overbought, aligning with the observed gradual price movements.

Alternative Data Analysis

Examining alternative data reveals mixed signals. Cardinal Health has 865 open positions, down 10% in recent months. This decline suggests the company might be focusing on cost reduction, which is not a positive sign for a growing entity.

However, a bullish signal comes from customer acquisition trends. The company’s webpage visitors increased by 26% over the past couple of months, potentially indicating a growing customer base. On the social media front, Cardinal Health has 18,000 Twitter followers, with no significant changes recently, implying steady customer engagement.

AltIndex's AI score for Cardinal Health is 61, which signals a "buy". This AI score aggregates data from fundamental, technical, and alternative sources to provide an actionable investment signal based on predictive analytics.

Conclusion and Recommendation

In conclusion, Cardinal Health showcases both strengths and weaknesses. Year-over-year revenue growth is strong, but the quarter-over-quarter declines in revenue, net income, and EBITDA raise red flags. From a technical perspective, the stock exhibits a bullish trend long-term, albeit tempered by recent short-term declines. Alternative data paints a mixed picture with potential cost-cutting measures balanced against a growing customer base.

Given the high P/E ratio and current performance metrics, investors should approach Cardinal Health with caution. While the AI score of 61 falls in the "buy" category, it is advisable to consider the broader context of fundamental and alternative data. A moderate or "hold" recommendation might be more suitable until some of the short-term concerns, particularly around profitability and operational efficiency, are addressed.

Investors are encouraged to monitor upcoming earnings reports and strategic initiatives by Cardinal Health to better understand its potential for long-term value creation.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.