Why Cardinal Health Stock Was Tumbling on Tuesday

Key Points

• It was a busy day for the company, which unveiled a fresh set of quarterly results and announced a pricey acquisition.

• It should soon own around three-quarters of Solaris Health.

• 10 stocks we like better than Cardinal Health ›

Sprawling healthcare company Cardinal Health (NYSE: CAH) reported its latest quarterly results and announced a sizable new acquisition Tuesday morning. The market didn't take these news items well, however, and in late-session trading, it was pushing the company's share price down by nearly 7%. The S&P 500 index, meanwhile, was bouncing higher with a more than 1% gain.

A nearly $2 billion move

Of the two pieces of news, that of the acquisition was clearly the more impactful. Cardinal Health announced that its The Specialty Alliance multiservices organization (MSO) platform has signed an agreement to acquire Solaris Health. The latter company was described by its acquirer as "the country's leading urology MSO."

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Cardinal Health will pay roughly $1.9 billion in cash to Solaris' owners (comprising a firm known as Lee Equity Partners and the company's physician partners) to acquire around a 75% stake in the business. In the press release trumpeting the deal, Cardinal Health said that it would bolster the scale of urology within The Specialty Alliance.

The company said it would finance the acquisition with cash on hand plus new debt. It expects the deal to close by the end of this calendar year.

Separately, Cardinal Health reported its fiscal fourth quarter of 2025 results. Revenue was basically flat year over year at just under $60.2 billion. Non-GAAP (adjusted) net income, on the other hand, rose by 11% to hit $501 million, or $2.08 per share.

On average, analysts tracking the stock were modeling $60.9 billion on the top line yet only $2.03 per share for adjusted net income.

Flying higher with guidance

Cardinal Health also raised its profitability guidance for the entirety of fiscal 2026. The company is now forecasting that adjusted earnings per share will come in at $9.30 to $9.50; its previous estimate was $9.10 to $9.30. That $9.30 at the low end of the new range is 13% higher than the actual fiscal 2025 result.

The company did not provide revenue guidance.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.