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Here's Why Cardinal Health (CAH) is a Strong Growth Stock

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For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

Momentum Score

Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

What if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Cardinal Health (CAH - Free Report)

Headquartered in Dublin, OH, Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (GMPD), and Other growth businesses. The company serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products, including branded and generic drugs, specialty pharmaceuticals, and consumer health products. This segment also provides biopharma solutions, offering data-driven insights, analytics, and commercialization support to pharmaceutical manufacturers. CAH delivers specialty drug distribution services in areas such as oncology, gastroenterology, and rheumatology. Its pharmacy management services cater to hospital and retail pharmacies, enhancing medication access and supply chain efficiency. The company also operates nuclear pharmacies, compounding radiopharmaceuticals used in diagnostic imaging and treatment. It currently has nearly 130 nuclear pharmacies and 30 PET cyclotron facilities.

CAH is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. CAH has a Growth Style Score of A, forecasting year-over-year earnings growth of 30.7% for the current fiscal year.

For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $10.77 per share. CAH boasts an average earnings surprise of +10.3%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CAH should be on investors' short list.

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