MCK McKesson Corporation - Fundamental Analysis
BULLISH
MCK Stock | Fundamental Analysis & Investment Insights
NYSE
•
Healthcare
•
Medical Distribution
Current Price
$842.09
Analyst Target
$929.36
+10.4% Upside
52W High
$867.63
52W Low
$558.13
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
88%
Analysis Accuracy
McKesson Corporation (MCK) presents a compelling investment case supported by robust earnings acceleration, consistent top-line growth, and strong analyst conviction, despite operating in a low-margin, capital-intensive distribution model. The stock has delivered exceptional long-term returns with a 373% five-year gain, underpinned by disciplined execution and favorable healthcare logistics tailwinds. While valuation appears stretched on P/E and the balance sheet lacks transparency, MCK trades at a significant discount to peers on price-to-sales and exhibits superior earnings momentum, with YoY EPS growth nearing 40%. Notably, insider selling raises caution, but the broader fundamental trajectory and sector positioning support continued outperformance.
Key Strengths
Exceptional earnings growth: 377% YoY and 360.6% QoQ earnings growth reflect strong operational leverage and cost discipline.
Consistent earnings beat record: 22 out of 25 quarters beat estimates, with 10+ consecutive beats and an average surprise of +8.9% over the last five quarters.
Attractive valuation relative to sector: P/S of 0.27 is dramatically below sector average of 1.0+ and peer group, suggesting significant undervaluation on revenue basis.
Strong analyst price target: $929.36 implies 10.4% upside, supported by 14 analysts maintaining a 'buy' consensus.
Superior long-term price performance: +373% 5Y return outpaces all listed peers, including high-growth medtech and pharma names.
Key Risks
Extremely low profitability: 1.04% net margin and 1.37% operating margin reflect razor-thin returns typical of distribution, limiting downside protection.
Severe financial opacity: Missing key metrics (EV, debt, cash, shares outstanding) raises transparency concerns and impedes accurate credit and valuation analysis.
Negative Price/Book ratio (-60.05): Suggests accumulated losses or negative equity, a serious red flag for financial stability and accounting integrity.
Poor liquidity profile: Current ratio of 0.88 and quick ratio of 0.47 indicate potential working capital strain, common in inventory-heavy distributors.
Aggressive insider selling: $49.87M in sales over 6 months, including CEO transactions, signals lack of confidence at the top despite strong results.
AI Fair Value Estimate
Based on comprehensive analysis
$929.36
+10.4% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare MCK against industry averages and similar companies
Insider Trading & Analyst Ratings
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