McKesson Corporation (MCK) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: McKesson Corporation

Updated on October 25, 2026 · accounts published on August 5, 2026

A highly profitable business on thin margins, with earnings growing faster than sales

McKesson trades at a P/E of 26.7× over the last 12 months, 13 % below its sector median of 30.7×, with a ROIC of 28 % against 6 % for its peers.

• Is McKesson expensive or cheap? At 26.8× earnings over the last 12 months, McKesson trades 13 % below the 30.7× median of its sector.
• How is the business doing? EPS grew 49 % and revenue 12 % over the last 12 months, with the operating margin steady at 1.6 %.
• How strong is the balance sheet? Net debt was 0.6× EBITDA in fiscal 2026, well under the 2.5× healthy ceiling, and the dividend has grown for 11 years.
• What to expect from the next earnings? Analysts expect EPS of $10.72 on November 4, 2026, and 24 of 31 rate McKesson a buy.
• Does McKesson invest enough in R&D and turn profit into cash? Free cash flow was 120 % of net income in fiscal 2026, above the 90 % healthy mark, while R&D spending was zero.

Is McKesson expensive or cheap?

McKesson trades at a P/E of 26.7× over the last 12 months, 13 % below the 30.7× median of 249 companies in its sector. Its nine-year average P/E of 144.6× is too skewed to be a useful benchmark, so the sector comparison carries more weight. The free cash flow yield of 9.7 % over the last 12 months is more than double the 4.2 % earnings yield, so the stock looks cheaper on cash than on reported profit. The shares are up 23 % in 12 months and sit 3 % below their 52-week high of $1,030.12.

How is the business doing?

Over the last 12 months, revenue rose 12 % and earnings per share rose 49 %, so profit is growing about four times faster than sales. Margins have barely moved: the operating margin of 1.6 % matches fiscal 2026 and sits just above the 1.5 % average for fiscal 2015-2026. McKesson earns little on each dollar of sales, yet uses its capital very well. ROIC of 27.9 % over the last 12 months is 22.0 points above the 5.9 % sector median, and it has stayed above 10 % in 9 of the last 10 fiscal years, with the weakest year at 5.7 % in 2019.

How strong is the balance sheet?

Net debt was $39.53 per share in fiscal 2026 ($71.69 of debt less $32.16 of cash), only 4 % of the share price and 0.6× EBITDA, against a 2.5× ceiling considered healthy in healthcare. The Altman Z-score of 6.2 is in the safe zone and the Piotroski score is 7 out of 9. The weak spot is a current ratio of 0.89, below 1. A ROE of −194 % alongside a positive net margin points to negative book equity, so ROIC is the better gauge. The dividend yields only 0.3 %, but the payout is 8 % of fiscal 2026 earnings and it has risen 11 years in a row.

What to expect from the next earnings?

McKesson reports on November 4, 2026, and analysts expect quarterly EPS of $10.72. Its track record supports that confidence: it has beaten EPS estimates in 7 of the last 8 quarters, and on August 5, 2026 it reported $9.93 against $9.56 expected, a 3.9 % beat. The fiscal 2027 EPS consensus has barely moved over the last 30 days, from $44.63 to $44.64 among 9 analysts, and revenue estimates are also flat. Of 31 analysts, 24 recommend buying, 6 holding and none selling. With the stock 3 % below its 52-week high, expectations are already high.

Does McKesson invest enough in R&D and turn profit into cash?

In healthcare, investors watch R&D because expiring patents mean lost revenue, and they watch cash because reported profit can overstate what a company actually earns. McKesson fails the drug-maker tests: R&D was 0.0 % of revenue in fiscal 2026 against a healthy 15 %, and its 3.6 % gross margin is far from the 70 % typical of branded pharma. Those figures describe a model that does not depend on patents, so the innovation lens says little here. McKesson passes the cash tests: free cash flow equalled 120 % of net income in fiscal 2026, above the 90 % threshold, and its 27.9 % ROIC clears the 12 % mark.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.