Cencora (COR) AI Stock Analysis

• Market Cap: $49.17B
• Dividend Yield: 0.83%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 36.1
• Beta (1Y): 0.30
• Revenue Growth: 11.64%
• EPS Growth: -23.54%
• Country: US
• Employees: 46,000
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical Distributors
• EPS (TTM): 7.03
• Shares Outstanding: 193,917,080
• 10 Day Avg. Volume: 1,449,048
• 30 Day Avg. Volume: 1,580,550
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.16
• Price to Cash Flow (P/CF): -4.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $281.00
• Price Target Upside: 10.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Cencora shows strong revenue growth and strategic positioning, particularly in the U.S. segment, supported by strategic acquisitions. However, high leverage and negative free cash flow raise concerns about financial stability. A high P/E ratio suggests overvaluation risk, balanced by a moderate dividend yield. Overall, the company demonstrates solid market momentum but must address financial challenges for sustained growth.

Positive Factors

Customer Acquisition

COR recently picked up Meijer as a new customer, which likely approaches Publix from a total distribution revenue perspective.

Earnings Guidance

COR raised FY25 segment revenue guidance from +7-9% to +9-11% growth.

Negative Factors

International Performance

International was the only area where guidance fell short, with weak clinical trial volumes anticipated through the first half of the fiscal year.

Cencora Business Overview & Revenue Model

Company Description

Cencora, Inc. engages provision of pharmaceutical products and business solutions that improve access to care. It operates through the Pharmaceutical Distribution Services and Other segments. The Pharmaceutical Distribution Services segment distributes a comprehensive offering of brand-name, specialty brand-name & generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies & equipment, outsourced compounded sterile preparations, and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent & chain retail pharmacies, mail order pharmacies, medical clinics, long-term care & alternate site pharmacies, and other customers. The Other segment focuses on global commercialization services and animal health and includes ABCS, World Courier, and MWI. The company was founded in 1947 and is headquartered in Chesterbrook, PA.

How the Company Makes Money

Cencora makes money through its core operations in pharmaceutical distribution and related healthcare services. The company's primary revenue streams include the sale of pharmaceuticals and medical products to healthcare providers, such as hospitals, pharmacies, and clinics. Cencora also earns revenue through specialty services that support pharmaceutical manufacturers, including patient support programs, consulting, and logistics services. Key partnerships with pharmaceutical manufacturers and healthcare providers play a significant role in maintaining its revenue streams, as these relationships ensure a steady supply chain and demand for its distribution and support services.

Cencora Financial Statement Overview

Summary

Cencora exhibits strong revenue growth and stable profitability margins, but high leverage and recent negative cash flows pose risks to financial stability. Addressing leverage and cash flow challenges will be crucial for sustaining long-term growth.

Income Statement

Cencora demonstrates strong revenue growth with a consistent increase from $189.89 billion in 2020 to $303.19 billion in TTM 2024, indicating robust market demand. Gross profit and net profit margins have remained stable, with a recent gross profit margin of 3.1% and net profit margin of 0.46% as of TTM 2024, reflecting efficiency in operations. The EBIT and EBITDA margins show consistent performance around 0.8% and 0.96%, respectively, indicating healthy operational profitability. However, the slight decline in net income in TTM 2024 compared to previous periods suggests a need for careful monitoring of profitability.

Balance Sheet

The balance sheet reveals a concerning high leverage with a debt-to-equity ratio of 22.52 in TTM 2024, posing a potential risk to financial stability. While the company's total assets have grown to $69.05 billion, the stockholders' equity remains low at $361.9 million, limiting financial flexibility. The equity ratio is a mere 0.52%, indicating significant reliance on debt. Despite these risks, the company has managed to increase its total assets consistently, showing underlying business growth.

Cash Flow

Cencora's cash flow analysis shows a negative operating cash flow in TTM 2024, which is a point of concern. The free cash flow has also turned negative at -$638 million, contrasting with positive cash flows in previous years. The operating cash flow to net income ratio has dropped significantly, indicating potential cash-generation issues. Although the past years have shown positive free cash flow, the recent downturn suggests a need for improved cash flow management.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
303.19B	293.96B	262.17B	238.59B	213.99B	189.89B
	Gross Profit
9.40B	9.91B	8.96B	8.33B	6.77B	5.20B
	EBIT
2.41B	2.18B	2.34B	2.37B	2.35B	-5.14B
	EBITDA
3.17B	3.25B	3.41B	3.11B	2.91B	-4.75B
	Net Income Common Stockholders
1.40B	1.51B	1.75B	1.70B	1.54B	-3.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.13B	3.13B	2.59B	3.39B	2.55B	4.60B
	Total Assets
67.10B	67.10B	62.56B	56.56B	57.34B	43.95B
	Total Debt
4.39B	4.39B	4.79B	5.70B	6.68B	4.12B
	Net Debt
1.26B	1.26B	2.20B	2.31B	4.14B	-478.23M
	Total Liabilities
66.31B	66.31B	61.89B	56.49B	56.75B	44.79B
	Stockholders Equity
645.94M	645.94M	666.29M	-289.78M	223.35M	-839.64M
Cash Flow		Free Cash Flow
-638.10M	3.00B	3.45B	2.21B	2.23B	1.84B
	Operating Cash Flow
-119.25M	3.48B	3.91B	2.70B	2.67B	2.21B
	Investing Cash Flow
-895.34M	-618.10M	-2.60B	-368.44M	-6.14B	-379.87M
	Financing Cash Flow
1.43B	-2.33B	-2.22B	-1.75B	1.95B	-603.62M

Cencora Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 253.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COR, the sentiment is Positive. The current price of 253.28 is above the 20-day moving average (MA) of 247.33, above the 50-day MA of 241.58, and above the 200-day MA of 234.28, indicating a bullish trend. The MACD of 2.29 indicates Negative momentum. The RSI at 59.95 is Neutral, neither overbought nor oversold. The STOCH value of 85.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COR.

Cencora Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCK	77 Outperform	$80.24B	29.35	51.23%	0.41%	14.29%	-1.20%
COR	73 Outperform	$49.17B	36.07	616.22%	0.83%	11.64%	-23.54%
HSIC	66 Neutral	$8.96B	23.20	11.49%	―	2.71%	-3.26%
CAH	60 Neutral	$31.28B	24.17	-43.80%	1.56%	2.85%	110.82%
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%
OMI	39 Underperform	$738.70M	―	-64.17%	―	3.55%	-757.75%

Cencora Corporate Events

Cencora Reports Strong Q1 2025 Financial Performance

On February 5, 2025, Cencora reported a revenue increase of 12.8% year-over-year to $81.5 billion for the first quarter of fiscal 2025. The adjusted diluted earnings per share rose by 13.7% to $3.73. The company has raised its adjusted diluted EPS guidance range for fiscal 2025 and emphasized its strategic focus on specialty services following the acquisition of Retina Consultants of America. Despite a decrease in GAAP diluted EPS and operating income, Cencora highlighted its customer-centric approach and execution of its pharmaceutical strategy as key drivers for maintaining its market leadership.

Cencora Announces Retirement of Two Board Members

On January 22, 2025, Cencora, Inc. announced that two members of its Board of Directors, Richard W. Gochnauer and Kathleen W. Hyle, plan to retire at the upcoming Annual Meeting of Stockholders on March 6, 2025. Their retirements will result in the reduction of the Board size from 13 to 11 members. Both directors indicated there were no disagreements involved in their decision to retire. Mr. Gochnauer has been on the board since 2008 and was part of the Audit and Compliance and Risk Committees, while Ms. Hyle, who joined in 2010, served as Chair of the Compensation and Succession Planning Committee and was a member of the Executive and Finance Committees.

Cencora Enhances Leadership with Strategic Acquisition

Cencora has completed the acquisition of Retina Consultants of America, acquiring an 85% interest in the company for $4.4 billion. This acquisition strengthens Cencora’s leadership in specialty medical services, expands its management services offerings, and is expected to enhance value for physicians and patients. Following the acquisition, Cencora raised its adjusted diluted earnings per share guidance for fiscal year 2025, reflecting anticipated benefits from the acquisition and continued momentum in its U.S. Healthcare Solutions segment.

Cencora’s Strategic Acquisition and Financial Maneuvering

Cencora, Inc. has successfully closed a $1.8 billion senior notes offering, comprised of $500 million in 2027 Notes, $600 million in 2029 Notes, and $700 million in 2035 Notes. The proceeds from this offering will be primarily used to finance the acquisition of Retina Consultants of America. This strategic move is intended to strengthen Cencora’s market position and support its ongoing operations. The offering marks a significant step in Cencora’s financial strategy as it terminated its $1.8 billion bridge financing commitments, reflecting the company’s adaptability in managing its financial obligations.