Healthcare Providers & Services Stocks Q2 Teardown: Cardinal Health (NYSE:CAH) Vs The Rest

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Cardinal Health (NYSE:CAH) and its peers.

The healthcare providers and services sector, from insurers to hospitals, benefits from consistent demand, generating stable revenue through premiums and patient services. However, it faces challenges from high operational and labor costs, reimbursement pressures that squeeze margins, and regulatory uncertainty. Looking ahead, an aging population with more chronic diseases and a shift toward value-based care create tailwinds. Digitization via telehealth, data analytics, and personalized medicine offers new revenue streams. Nonetheless, headwinds persist, including clinical labor shortages, ongoing reimbursement cuts, and regulatory scrutiny over pricing and quality.

The 40 healthcare providers & services stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was in line.

Luckily, healthcare providers & services stocks have performed well with share prices up 12.2% on average since the latest earnings results.

Cardinal Health (NYSE:CAH)

Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.

Cardinal Health reported revenues of $60.16 billion, flat year on year. This print fell short of analysts’ expectations by 1%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ full-year EPS guidance estimates.

"Fiscal 2025 was a transformative year for Cardinal Health, and we closed the year with momentum, delivering strong fourth quarter results," said Jason Hollar, CEO of Cardinal Health.

Unsurprisingly, the stock is down 1.6% since reporting and currently trades at $155.29.

Is now the time to buy Cardinal Health? Access our full analysis of the earnings results here, it’s free.

Best Q2: CVS Health (NYSE:CVS)

With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE:CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.

CVS Health reported revenues of $98.92 billion, up 8.4% year on year, outperforming analysts’ expectations by 5.1%. The business had a stunning quarter with an impressive beat of analysts’ same-store sales estimates.

The market seems happy with the results as the stock is up 21.1% since reporting. It currently trades at $75.49.

Is now the time to buy CVS Health? Access our full analysis of the earnings results here, it’s free.

Oscar Health (NYSE:OSCR)

Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE:OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.

Oscar Health reported revenues of $2.86 billion, up 29% year on year, falling short of analysts’ expectations by 3.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 32.9% since the results and currently trades at $18.37.

Read our full analysis of Oscar Health’s results here.

Surgery Partners (NASDAQ:SGRY)

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ:SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Surgery Partners reported revenues of $826.2 million, up 8.4% year on year. This number topped analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also put up a beat of analysts’ EPS and sales volume estimates.

The stock is down 1.7% since reporting and currently trades at $21.85.

Read our full, actionable report on Surgery Partners here, it’s free.

DaVita (NYSE:DVA)

With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE:DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.

DaVita reported revenues of $3.38 billion, up 6.1% year on year. This result surpassed analysts’ expectations by 0.7%. Zooming out, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a slight miss of analysts’ sales volume estimates.

The stock is down 7.2% since reporting and currently trades at $130.80.

Read our full, actionable report on DaVita here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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