Cardinal Health, Inc. (CAH) Hits Fresh High: Is There Still Room to Run?

Shares of Cardinal Health (CAH) have been strong performers lately, with the stock up 16.6% over the past month. The stock hit a new 52-week high of $235.71 in the previous session. Cardinal has gained 13.4% since the start of the year compared to the -2.7% move for the Zacks Medical sector and the -3.6% return for the Zacks Medical - Dental Supplies industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 30, 2026, Cardinal reported EPS of $3.17 versus consensus estimate of $2.8 while it missed the consensus revenue estimate by 2.27%.For the current fiscal year, Cardinal is expected to post earnings of $10.76 per share on $256.24 in revenues. This represents a 30.58% change in EPS on a 15.12% change in revenues. For the next fiscal year, the company is expected to earn $11.98 per share on $278.75 in revenues. This represents a year-over-year change of 11.29% and 8.79%, respectively.Valuation MetricsCardinal may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.Cardinal has a Value Score of A. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.In terms of its value breakdown, the stock currently trades at 21.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 16X. On a trailing cash flow basis, the stock currently trades at 20X versus its peer group's average of 11.6X. Additionally, the stock has a PEG ratio of 1.27. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Cardinal an interesting choice for value investors.Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Cardinal currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Cardinal passes the test. Thus, it seems as though Cardinal shares could have a bit more room to run in the near term.How Does CAH Stack Up to the Competition?Shares of CAH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Align Technology, Inc. (ALGN). ALGN has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of B.Earnings were strong last quarter. Align Technology, Inc. beat our consensus estimate by 14.16%, and for the current fiscal year, ALGN is expected to post earnings of $11.36 per share on revenue of $4.19 billion.Shares of Align Technology, Inc. have gained 4.9% over the past month, and currently trade at a forward P/E of 15.04X and a P/CF of 14.4X.The Medical - Dental Supplies industry is in the top 35% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CAH and ALGN, even beyond their own solid fundamental situation.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks