MCK

Healthcare

McKesson Corporation

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$101.7B	$106.6B	$108.7B	$112.1B	$122.7B	$122.5B	$137.6B	$179.0B	$190.9B	$198.5B	$208.4B	$214.3B	$231.1B	$238.2B	$264.0B	$276.7B	$309.0B	$359.1B	+16.2%
Gross Profit	$5.0B	$5.4B	$5.7B	$6.0B	$6.6B	$7.0B	$8.3B	$11.4B	$11.4B	$11.3B	$11.2B	$11.8B	$12.0B	$12.1B	$13.1B	$12.4B	$12.8B	$13.3B	+3.9%
Gross Margin	4.9%	5.0%	5.2%	5.3%	5.4%	5.7%	6.0%	6.4%	6.0%	5.7%	5.4%	5.5%	5.2%	5.1%	5.0%	4.5%	4.2%	3.7%	-0.4pp
Operating Income	$1.5B	$1.2B	$2.0B	$1.8B	$2.1B	$2.3B	$2.4B	$3.0B	$3.5B	$7.1B	$762.0M	$886.0M	$2.5B	-$5.0B	$2.0B	$4.4B	$3.9B	$4.4B	+13.1%
Operating Margin	1.5%	1.1%	1.8%	1.6%	1.8%	1.9%	1.7%	1.7%	1.9%	3.6%	0.4%	0.4%	1.1%	-2.1%	0.8%	1.6%	1.3%	1.2%	-0.0pp
Net Income	$990.0M	$823.0M	$1.3B	$1.2B	$1.4B	$1.3B	$1.3B	$1.5B	$2.3B	$5.1B	$67.0M	$34.0M	$900.0M	-$4.5B	$1.1B	$3.6B	$3.0B	$3.3B	+9.8%
Net Margin	1.0%	0.8%	1.2%	1.1%	1.1%	1.1%	0.9%	0.8%	1.2%	2.6%	0.0%	0.0%	0.4%	-1.9%	0.4%	1.3%	1.0%	0.9%	-0.1pp
Free Cash Flow	$674.0M	$1.2B	$2.1B	$2.1B	$2.7B	$2.2B	$2.9B	$2.7B	$3.2B	$4.3B	$3.9B	$3.6B	$4.0B	$4.1B	$4.0B	$4.8B	$3.9B	$5.5B	+42.9%
FCF Margin	0.7%	1.1%	1.9%	1.9%	2.2%	1.8%	2.1%	1.5%	1.7%	2.2%	1.9%	1.7%	1.7%	1.7%	1.5%	1.7%	1.3%	1.5%	+0.3pp
EPS (Diluted)	$3.32	$2.95	$4.62	$4.57	$5.59	$5.59	$5.41	$6.27	$9.70	$22.73	$0.32	$0.17	$4.95	$-28.26	$7.23	$25.03	$22.39	$25.72	+14.9%

Total Debt$5.7B

Cash & Equiv.$5.7B

Net Cash$37.0M

4 min read

1. THE BIG PICTURE

McKesson is a study in the power of extreme scale, moving over $400 billion in annual goods while retaining just one penny of every dollar as profit (XBRL). McKesson Corporation is currently undergoing a strategic transformation, divesting its European operations to double down on high-margin specialty areas like oncology and biopharma services. This shift aims to insulate the business from the structural vulnerabilities of its core distribution model, where massive volumes are balanced against intense regulatory pressure and a dangerous reliance on a handful of giant customers.

2. WHERE THE RISKS HIT HARDEST

McKesson’s primary stated advantage of "scale and diversity" (10-K Item 1) is directly threatened by its extreme customer concentration. While McKesson Corporation operates a massive global network, its financial health is disproportionately tied to a few players: the ten largest customers account for 72% of consolidated revenues (Risks). A single disagreement or a shift toward "internal disintermediation"—where a large customer develops its own supply chain capabilities—could instantly neutralize the scale advantages McKesson has spent decades building.

Furthermore, McKesson Corporation’s push into "data and analytics" and "artificial intelligence" (Competitive Position) is a necessary but risky defense against healthcare reform. As the Inflation Reduction Act and changes to Medicare/Medicaid reimbursement levels threaten to compress margins, McKesson is forced to rely on technology to find efficiencies. If these tech-enabled services fail to offset the mandatory price cuts dictated by new regulations, McKesson Corporation’s already thin 1.3% operating margin (XBRL) could face a terminal squeeze.

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company growing much faster than its peers but struggling to convert that growth into cash. McKesson leads its peer group with 16.2% revenue growth, significantly outperforming UnitedHealth (+11.8%) and CVS (+7.8%). However, this growth has not yet translated to the bottom line in a meaningful way; McKesson ranks last among its peers in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at -0.0% (XBRL).

This divergence is likely driven by the capital-intensive nature of its recent 37% revenue surge in the Oncology & Multispecialty segment, which was fueled by acquisitions and specialty distribution growth (8-K). While the North American Pharmaceutical segment grew 9%, the overall growth trajectory is slightly decelerating from the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter rate of 16.2% to the most recent quarter’s 11%. This cooling is partially attributed to a 10% profit drop in Medical-Surgical Solutions, which suffered from lower physician office volumes and a weak seasonal illness cycle (8-K). Supplemental signals show short interest remains low at 1.5% of float, suggesting that despite the lack of current FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders, the market is not yet betting against McKesson Corporation's growth-through-specialty strategy.

4. IS IT WORTH IT AT THIS PRICE?

At 21.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, the market is pricing in approximately 1.7% long-term growth (CAPM analysis). This represents a significant premium to the peer median of 14.8x. Investors are essentially paying more for McKesson’s 1% net margin than they are for Medtronic’s 13.9% or UnitedHealth’s 4.2% (XBRL).

This premium is justified only if McKesson can sustain its double-digit revenue growth while successfully pivoting to higher-margin specialty services. McKesson Corporation’s actual growth trajectory (16.2% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) far exceeds the 1.7% implied by the market, suggesting the price is supported by current momentum. However, the biggest risk to this valuation is the "novel theories of liability" in ongoing opioid litigation (Risks). If legal settlements exceed McKesson Corporation's reserves, the market will likely re-rate the stock toward the lower multiples seen at Cigna (7.9x) or CVS (9.4x), which face similar regulatory and structural headwinds.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the Oncology & Multispecialty segment growth (currently 37%) slows significantly, as this is the primary engine for margin expansion.
Cautious if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin remains negative for consecutive quarters, indicating that McKesson Corporation’s growth is consuming more cash than it generates.
Constructive if McKesson Corporation successfully navigates the Inflation Reduction Act’s implementation without a corresponding drop in its 1.3% operating margin.

6. BOTTOM LINE

Structural Advantage: Massive distribution scale combined with a dominant position in community-based oncology and specialty pharmaceutical supply chains.

Bottom Line: McKesson is a high-growth leader in a low-margin industry, but its premium valuation and extreme customer concentration make it a high-stakes bet on management's ability to outrun regulatory and legal pressures.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Litigation and Regulatory Proceedings: McKesson Corporation is routinely named as a defendant in class action, commercial, and regulatory litigation. These disputes are costly, time-consuming, and can result in monetary damages, penalties, fines, or injunctive relief that forces changes to business operations.
Opioid Distribution Litigation: McKesson Corporation is a defendant in numerous lawsuits brought by governmental entities and private parties alleging negligence and public nuisance regarding the distribution of controlled substances. These cases often involve novel theories of liability, significant management distraction, and the risk of long-term financial exposure.
Customer Concentration: A significant portion of McKesson Corporation’s business is tied to a small number of customers. As of March 31, 2025, the largest customer represented 24% of total consolidated revenues, while the ten largest customers combined accounted for 72% of consolidated revenues and 48% of total trade receivables.
Healthcare Reform and Reimbursement: Changes in government reimbursement methodologies, such as cuts to Medicare and Medicaid levels or shifts toward value-based payments, directly reduce profit margins for McKesson Corporation and its customers.
Impact of the Inflation Reduction Act (IRA): The implementation of the IRA, including government drug price negotiations and inflationary rebates, is expected to alter the pharmaceutical value chain, potentially requiring McKesson Corporation to restructure distribution agreements and adapt its business model.

2. Company-Specific Risks

Goodwill and Intangible Asset Impairment: McKesson Corporation is required to test goodwill and long-lived assets for impairment annually or upon the occurrence of triggering events, such as a significant decline in stock price or the loss of a major customer.
Change Healthcare Split-off Tax Risk: If the 2020 split-off of Change Healthcare is determined by the IRS or courts to be a taxable transaction, McKesson Corporation could be required to pay substantial U.S. federal income taxes.
Generic Pharmaceutical Sourcing: Through its ClarusONE joint venture with Walmart Inc., McKesson Corporation faces risks related to product availability and pricing; supply chain challenges or patent litigation involving generic manufacturers can negatively impact margins.
Data Services and AI Integration: McKesson Corporation’s growth strategy relies on expanding data services and AI, which introduces risks related to data usage rights, potential infringement of third-party intellectual property, and the possibility that these technologies fail to provide a competitive advantage.

3. Regulatory/Legal Risks

Healthcare Fraud and Abuse: McKesson Corporation is subject to the federal Anti-Kickback Statute and other laws governing fraud, waste, and abuse. Non-compliance can lead to the loss of licenses or the ability to participate in Medicare, Medicaid, and other government programs.
Controlled Substance Compliance: McKesson Corporation must adhere to strict requirements from the DEA, FDA, and state boards of pharmacy. Failure to maintain necessary permits or comply with security requirements can result in product recalls, seizures, injunctions, or criminal enforcement actions.
Privacy and Cybersecurity Laws: Frequent changes in global privacy, data protection, and AI laws increase compliance burdens. A material data breach could lead to regulatory fines, private class-action litigation, and contractual breaches.
Anti-Bribery and Anti-Corruption: McKesson Corporation is subject to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act; failure to comply with these regulations can result in significant civil and criminal penalties.

4. Financial Impact Map

Litigation and Regulatory Proceedings → Results of Operations → Potential for monetary damages, penalties, fines, and costs associated with business operational changes. Opioid Distribution Litigation → Results of Operations → Significant expense, management distraction, and potential for negotiated settlements or adverse judgments. Customer Concentration → Total Consolidated Revenues and Trade Receivables → Loss of a major customer or payment default would materially impact revenue and liquidity. Healthcare Reform and Reimbursement → Profit Margins → Reductions in Medicare/Medicaid reimbursement levels directly compress margins for McKesson Corporation and its customers. Inflation Reduction Act → Distribution Agreements → Potential for reduced revenue or margin compression due to changes in transactional flows and manufacturer pricing policies.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-Q	Feb 2026	Dec 2025
14A	Jun 2025	—
10-K	May 2025	Mar 2025