Core Viewpoint - Growth investors are increasingly focused on identifying stocks with above-average financial growth, which can lead to solid returns, but finding such stocks is challenging due to their inherent risks and volatility [1] Group 1: Company Overview - McKesson is identified as a promising growth stock, supported by a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 16%, with projected EPS growth of 12.6% this year, significantly outperforming the industry average of 1.3% [5] - McKesson's sales are expected to grow by 13% this year, compared to the industry average of 1.1% [7] Group 2: Key Metrics - The asset utilization ratio for McKesson is 4.95, indicating that the company generates $4.95 in sales for every dollar in assets, which is substantially higher than the industry average of 0.72 [6] - The current-year earnings estimates for McKesson have been revised upward, with the Zacks Consensus Estimate increasing by 0.1% over the past month [9] Group 3: Investment Potential - McKesson has achieved a Zacks Rank of 2 (Buy) and a Growth Score of A, indicating its potential as an outperformer and a solid choice for growth investors [11]

V i e w p o i n t | 25 Jun 2025 16:16:30 ET │ 19 pages Thematic Equity Strategy A Global Perspective on Artificial Intelligence CITI'S TAKE AI remains one of our top Growth themes in the US given its premium growth expectations at justifiable valuations. In this report we take a broader look at AI across the globe and our Enablers versus Adopters value chain delineation. We reiterate the need for value chain diversification within the theme while also stressing geographic reach. Investors solely focused on ...

Group 1: Company Performance - McKesson (MCK) has gained approximately 27.9% year-to-date, outperforming the average loss of 4.9% in the Medical group [4] - The Zacks Consensus Estimate for McKesson's full-year earnings has increased by 1.5% over the past quarter, indicating improving analyst sentiment [3] - McKesson belongs to the Medical - Dental Supplies industry, which has seen a loss of about 0.9% this year, further highlighting MCK's strong performance within its specific industry [5] Group 2: Industry Context - The Medical group is currently ranked 6 within the Zacks Sector Rank, which evaluates the strength of 16 individual sector groups [2] - The Medical - Biomedical and Genetics industry, where Benitec Biopharma Limited (BNTC) operates, is ranked 87 and has experienced a decline of 4.8% since the beginning of the year [6] - Investors should monitor both McKesson and Benitec Biopharma Limited as they have shown solid performance relative to their respective sectors [6]

Core Insights - Zacks Premium provides various tools to help investors make informed decisions and invest confidently in the stock market [1][2] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [4] - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings and cash flow [5] - The Momentum Score helps investors capitalize on price trends by evaluating recent price changes and earnings estimate shifts [6] - The VGM Score combines all three Style Scores, providing a comprehensive assessment of stocks based on value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8][9] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [11] Stock Highlight: McKesson Corporation - McKesson Corporation, a healthcare services and IT company, holds a Zacks Rank of 2 (Buy) and a VGM Score of A, making it a strong candidate for growth investors [13] - The company is projected to experience year-over-year earnings growth of 12.6% for the current fiscal year, supported by positive earnings estimate revisions from analysts [14]

Market Overview - Market faced uncertainty due to Middle East concerns and trade agreement details between the U S and China [1][2][4] - Economic data, including CPI figures, influenced market movements [3] - S&P 500 struggled to break record highs, remaining within a tight range [4][5] Sector Performance - Energy sector was the top performer, with oil prices surging almost 5% to over $68 per barrel [7] - Consumer discretionary and materials sectors experienced declines of more than 1% [7][8] Individual Company Highlights - Netflix expressed optimism despite trade uncertainties and potential tariffs, planning to invest over $1 billion in the UK over the next four years [9][10] - Goldman Sachs maintained a buy rating from Bank of America with a price target of $700, citing resilience in an uncertain environment [10] - McKesson raised its earnings forecast due to broad-based operational momentum, with Morgan Stanley maintaining an overweight rating and raising its price target from $745 to $770 [11][12] - Lockheed Martin shares dropped 42%, the biggest drop since April, after a report that the Air Force cut its request for F-35 jets [14] - Vera Bradley shares fell 19%, experiencing their worst day since the pandemic, and the company suspended its guidance and announced the departure of its CEO [17] Bond Market - Two-year yield decreased by about seven basis points, falling below 4% [19] - The 30-year bond auction is scheduled for tomorrow [20] Earnings Reports - Oracle's fourth-quarter adjusted EPS was $170 per share, exceeding expectations, with revenue also above estimates at $159 billion [22] - Oxford Industries' first-quarter adjusted EPS was $182, beating estimates by one penny, but its second-quarter outlook missed expectations [24][25] - Oracle expects cloud infrastructure growth rates to increase from 50% for its full year 2025 to over 70% in the full year 2026 [26]

Group 1 - BofA Securities analyst Allen Lutz reiterated a Buy rating on Cardinal Health, Inc. and raised the price forecast from $165 to $170, anticipating strong performance and favorable industry dynamics [1][2] - Cardinal Health is set to host an investor day on June 12, where it will provide an updated business outlook and a roadmap for sustained double-digit EPS growth [1][2] - The company is expected to revise its Pharmaceutical and Specialty Solutions EBIT growth outlook upward, with long-term Pharmaceutical EBIT growth targets potentially increasing from 4-6% to 5-7% or 5-8% [2][3] Group 2 - Cardinal Health's prior scale disadvantage in specialty areas is diminishing, and recent M&A activity could have a more significant growth impact compared to larger competitors [6] - The company plans to update its growth path for the Global Medical Products and Distribution segment, addressing tariff impacts and evolving demand trends [7] - The Other segment has shown solid growth, with potential for sustained high-single-digit EBIT growth, while maintaining a balanced capital allocation strategy [8]

PaySign Inc. Conference Call Summary Company Overview - **Company Name**: PaySign Inc. (Ticker: PAYS) - **Industry**: Payment services, primarily in healthcare - **Headquarters**: Southern Nevada, near Las Vegas - **Incorporation Year**: 1995 - **Public Listing**: Went public through a reverse merger in 2018 Core Business Segments - **Healthcare Payments**: Predominantly provides payment services to the healthcare industry, including patient affordability programs and plasma donor payments [5][9] - **Patient Affordability Programs**: Helps patients cover copays for expensive medications, with a focus on reducing abandonment rates for prescriptions [9][10] - **Plasma Industry**: Engaged in electronic payments for plasma donation centers, holding a 40% market share in the U.S. [8][11] Financial Performance - **Revenue**: - 2024 projected revenue: $58.4 million - 2023 revenue: $87 million from plasma business and $12.7 million from patient affordability [11][16] - Patient affordability business expected to grow at least 135% in 2024 [11] - **Adjusted EBITDA**: $13 million for the trailing twelve months, with margins improving [16][34] - **Cash Position**: $111 million in cash, with zero debt [15][34] - **Gross Margins**: Increased to 62.9% from 53% year-over-year [14] Market Dynamics - **Plasma Market**: - U.S. provides over 75% of the world's plasma, with a normal growth rate of about 5% annually [8][26] - Anticipated decline of 8-10% in plasma business revenue due to operational adjustments post-COVID [26] - **Patient Affordability Market**: - Total Addressable Market (TAM) estimated at over $500 million, indicating significant growth potential [29] Strategic Initiatives - **Acquisition of Gamma Innovation**: - Acquired for $16 million, aimed at enhancing software capabilities in the plasma industry [28][30] - **Dynamic Business Rules Technology**: - Proprietary technology that saved customers over $100 million in claims in 2024, expected to double in 2025 [22] Leadership and Expertise - **Senior Leadership**: Comprised of individuals with extensive backgrounds in banking, payments, and healthcare, enhancing domain expertise [13][39] - **Analyst Coverage**: Covered by five firms, all with buy or equivalent ratings, target prices ranging from $6 to $8 [35] Additional Insights - **Customer Engagement**: The company emphasizes direct partnerships with pharmaceutical companies, enhancing payment capabilities and transparency [42][44] - **Operational Efficiency**: The call center operates at breakeven, indicating effective cost management [17] - **Regulatory Environment**: The company operates primarily in the U.S. market, with limited applicability of its services outside due to different healthcare systems [37] Conclusion PaySign Inc. is positioned for growth in the healthcare payment sector, with strong financials, innovative technology, and a strategic focus on expanding its market share in both the plasma and patient affordability segments. The leadership team's expertise and recent acquisitions further bolster its competitive advantage in a rapidly evolving industry.

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to associated risks and volatility [1] Group 1: Company Overview - McKesson (MCK) is highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 16%, with projected EPS growth of 12.5% this year, surpassing the industry average of 8.2% [4] Group 2: Key Growth Metrics - The asset utilization ratio for McKesson is 4.95, indicating that the company generates $4.95 in sales for every dollar in assets, significantly higher than the industry average of 0.77 [5] - McKesson's sales are expected to grow by 13% this year, compared to the industry average of 3.2% [6] Group 3: Earnings Estimate Revisions - There is a positive trend in earnings estimate revisions for McKesson, with the current-year earnings estimates increasing by 1.7% over the past month [7] Group 4: Investment Positioning - McKesson has achieved a Growth Score of A and a Zacks Rank of 2, positioning it well for potential outperformance in the growth stock category [9]

Company Performance - McKesson (MCK) has returned approximately 26.6% since the beginning of the calendar year, outperforming the Medical sector, which has lost about 4.9% on average [4] - McKesson holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, with the consensus estimate for full-year earnings having increased by 1.4% over the past quarter [3] - McKesson belongs to the Medical - Dental Supplies industry, which includes 14 companies and currently ranks 84 in the Zacks Industry Rank, with this group having lost about 1.9% year-to-date [5] Industry Comparison - The Medical sector consists of 999 individual stocks and currently holds a Zacks Sector Rank of 4, which is based on the average Zacks Rank of the individual stocks within the sector [2] - Another stock in the Medical sector, Adagene Inc. Sponsored ADR (ADAG), has a year-to-date return of 4.8% and also holds a Zacks Rank of 2 (Buy), with its consensus EPS estimate increasing by 7.9% over the past three months [4][5] - The Medical - Biomedical and Genetics industry, which includes Adagene, has 503 stocks and is ranked 75, with this industry having moved -2.9% since the beginning of the year [6]

Core Insights - McKesson (MCK) and Cardinal Health (CAH) are major players in the U.S. healthcare distribution sector, benefiting from consistent demand and long-term industry trends [1][2] - Investors are evaluating which company presents a stronger investment opportunity amid evolving healthcare regulations and inflationary pressures [2] Financial Performance - McKesson reported Q4 fiscal 2025 adjusted EPS of $10.12, exceeding the Zacks Consensus Estimate of $9.81 by 3.2%, with a year-over-year improvement of 63.8% [3] - Cardinal Health reported Q3 fiscal 2025 adjusted EPS of $2.35, surpassing the Zacks Consensus Estimate of $2.15 by 9.3%, with a year-over-year increase of 12.4% [4] Estimates Comparison - The Zacks Consensus Estimate for McKesson's fiscal 2026 sales and EPS indicates a year-over-year improvement of 12.4% and 12.3%, respectively, with EPS estimates improving by 1.4% over the past 60 days [5] - The Zacks Consensus Estimate for Cardinal Health's 2025 sales suggests a year-over-year decline of 1.7%, while EPS is expected to improve by 7.8%, with EPS estimates increasing by 2.3% over the past 30 days [8] Strategic Positioning - McKesson's diversification into higher-margin areas such as oncology and biopharma services supports margin stability and positions the company well for future growth [11] - McKesson's recent earnings report highlighted solid revenue growth, stable margins, and robust free cash flow, alongside consistent shareholder returns through share repurchases and dividend increases [12] - Cardinal Health is focusing on efficiency gains and cost controls while expanding its higher-growth medical segment, which is expected to drive growth [15] - Cardinal Health's first-quarter performance showed strong revenue growth and improving profitability due to effective cost-saving initiatives [16] Price Performance - Year-to-date, McKesson shares have increased by 25.7%, while Cardinal Health shares have surged by 29.2%, driven by rising demand for drug retailing, particularly GLP-1 drugs [17] Investment Outlook - Both companies currently hold a Zacks Rank 3 (Hold), complicating the investment decision [18] - McKesson's style score of 'A' indicates strong growth prospects and attractive valuation, while Cardinal Health's style score of 'C' reflects attractive valuation but lower growth potential [19] - Based on growth estimates and style scores, McKesson is viewed as a better investment choice at present [19]