McKesson Current Valuation vs. Price To Earning

MCK Stock  USD 570.98  8.20  1.46%   
Considering McKesson's profitability and operating efficiency indicators, McKesson may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess McKesson's ability to earn profits and add value for shareholders. The value of Price To Sales Ratio is estimated to slide to 0.23. The value of Days Sales Outstanding is estimated to slide to 22.93. At this time, McKesson's Non Operating Income Net Other is quite stable compared to the past year. Net Income Per Share is expected to rise to 23.66 this year, although the value of Income Tax Expense will most likely fall to about 396.6 M.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.06440.0407
Way Up
Slightly volatile
For McKesson profitability analysis, we use financial ratios and fundamental drivers that measure the ability of McKesson to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well McKesson utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between McKesson's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of McKesson over time as well as its relative position and ranking within its peers.
  

McKesson's Revenue Breakdown by Earning Segment

Check out Correlation Analysis.
For more information on how to buy McKesson Stock please use our How to buy in McKesson Stock guide.
Is Health Care Providers & Services space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of McKesson. If investors know McKesson will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about McKesson listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.62)
Dividend Share
2.57
Earnings Share
19.36
Revenue Per Share
2.5 K
Quarterly Revenue Growth
0.213
The market value of McKesson is measured differently than its book value, which is the value of McKesson that is recorded on the company's balance sheet. Investors also form their own opinion of McKesson's value that differs from its market value or its book value, called intrinsic value, which is McKesson's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because McKesson's market value can be influenced by many factors that don't directly affect McKesson's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between McKesson's value and its price as these two are different measures arrived at by different means. Investors typically determine if McKesson is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, McKesson's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

McKesson Price To Earning vs. Current Valuation Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining McKesson's current stock value. Our valuation model uses many indicators to compare McKesson value to that of its competitors to determine the firm's financial worth.
McKesson is rated top company in current valuation category among its peers. It is regarded fourth in price to earning category among its peers . The ratio of Current Valuation to Price To Earning for McKesson is about  2,822,436,908 . Comparative valuation analysis is a catch-all technique that is used if you cannot value McKesson by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

McKesson Current Valuation vs. Competition

McKesson is rated top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Health Care industry is now estimated at about 166.54 Billion. McKesson totals roughly 76.15 Billion in current valuation claiming about 46% of equities under Health Care industry.

McKesson Price To Earning vs. Current Valuation

Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

McKesson

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
76.15 B
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investors monitor daily. Holding a low PE stock is less risky because when a company's profitability falls, it is likely that earnings will also go down as well. In other words, if you start from a lower position, your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.

McKesson

P/E

 = 

Market Value Per Share

Earnings Per Share

 = 
26.98 X
Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.

McKesson Price To Earning Comparison

McKesson is currently under evaluation in price to earning category among its peers.

McKesson Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in McKesson, profitability is also one of the essential criteria for including it into their portfolios because, without profit, McKesson will eventually generate negative long term returns. The profitability progress is the general direction of McKesson's change in net profit over the period of time. It can combine multiple indicators of McKesson, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-881 M-925 M
Operating Income3.9 B4.1 B
Income Before Tax3.8 BB
Total Other Income Expense Net-120 M-126 M
Net IncomeB3.2 B
Income Tax Expense629 M396.6 M
Net Income Applicable To Common Shares4.1 B4.3 B
Net Income From Continuing Ops3.2 B3.3 B
Non Operating Income Net Other571.5 M600.1 M
Interest Income118 M98.8 M
Net Interest Income-134 M-140.7 M
Change To Netincome161 M152.9 M
Net Income Per Share 22.54  23.66 
Income Quality 1.44  1.37 
Net Income Per E B T 0.79  0.83 

McKesson Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on McKesson. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of McKesson position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the McKesson's important profitability drivers and their relationship over time.

Use McKesson in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if McKesson position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in McKesson will appreciate offsetting losses from the drop in the long position's value.

McKesson Pair Trading

McKesson Pair Trading Analysis

The ability to find closely correlated positions to McKesson could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace McKesson when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back McKesson - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling McKesson to buy it.
The correlation of McKesson is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as McKesson moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if McKesson moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for McKesson can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your McKesson position

In addition to having McKesson in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Tech Funds Theme
Funds or Etfs that invest in companies involved in research, development, testing, or distribution of technologically based goods and services. The Tech Funds theme has 44 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Tech Funds Theme or any other thematic opportunities.
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When determining whether McKesson is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if McKesson Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Mckesson Stock. Highlighted below are key reports to facilitate an investment decision about Mckesson Stock:
Check out Correlation Analysis.
For more information on how to buy McKesson Stock please use our How to buy in McKesson Stock guide.
You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
To fully project McKesson's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of McKesson at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include McKesson's income statement, its balance sheet, and the statement of cash flows.
Potential McKesson investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although McKesson investors may work on each financial statement separately, they are all related. The changes in McKesson's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on McKesson's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.