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Cardinal Health (CAH) Ties Up to Deliver Products Via Drones

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·3-min read
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Cardinal Health, Inc. CAH recently tied up with Zipline and has begun long-range drone deliveries in North Carolina. The latest partnership between the two companies is aimed at transforming patients’ experience while improving care delivery.

It is worth mentioning that Cardinal Health’s launch of product delivery via drones follows a successful pilot phase and Part 135 certification awarded by the Federal Aviation Administration.

It should also be noted that two other renowned U.S. health care organizations — Novant Health and Magellan Rx Management — are joining Cardinal Health in this effort.

The latest collaboration to deliver its products and boost its distribution strategy is expected to significantly strengthen its Pharmaceutical business on a global scale.

Rationale Behind the Partnership

As part of the latest collaboration, Cardinal Health is expected to deliver certain pharmaceutical products and medical supplies to Cannon Pharmacy Main, an independent pharmacy chain servicing North Carolina locations. This is aimed at mitigating the inventory stock-out risks and lessening the barriers for patients accessing necessary products.

Cardinal Health’s management believes that the tie-up with Zipline will enable it to expand its distribution services with innovative delivery methods. This, in turn, will likely aid its customers in meeting their patients’ evolving needs, both in present times and in the future.

Industry Prospects

Per a report by Fortune Business Insights, the global drone package delivery market is anticipated to grow from $1,522.4 million in 2021 to $31,188.7 million by 2028 at CAGR of approximately 53.9%. Factors like faster delivery time, high accuracy and minimal human contact are expected to drive the market.

Given the growing market potential, the new collaboration seems to have been timed well.

Recent Developments

This month, Cardinal Health announced the addition of a new distribution center in the Columbus, OH area as part of a multi-year warehouse modernization and growth plan. The new distribution center will support the company's at-Home Solutions business.

In April, Cardinal Health collaborated with Innara Health on the redesign of the NTrainer System. The next-generation NTrainer will likely be smaller, more intuitive and easier to integrate into NICU feeding protocols.

Price Performance

Shares of the company have lost 5.7% in the past year compared with the industry’s 10.7% fall and the S&P 500’s 11.6% decline.

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Zacks Investment Research


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Zacks Rank & Stocks to Consider

Currently, Cardinal Health carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, Omnicell, Inc. OMCL and Masimo Corporation MASI.

AMN Healthcare, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 13.3% against the industry’s 44.7% fall in the past year.

Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 20%. OMCL’s earnings surpassed estimates in three of the trailing four quarters and missed the same in the other, the average beat being 13.4%.

Omnicell has lost 25.1% compared with the industry’s 54.9% fall over the past year.

Masimo, carrying a Zacks Rank #2 at present, has an earnings yield of 3.4% against the industry’s negative yield. MASI’s earnings surpassed estimates in the trailing four quarters, the average beat being 4.4%.

Masimo has lost 43.3% compared with the industry’s 25.5% fall over the past year.


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Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
 
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
 
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