Understanding McKesson (MCK) as a “healthcare infrastructure × specialty platform”: how a low-margin giant can build “depth”

* This report is based on data as of 2026-01-08.

What does this company do? (Business explanation a middle schooler can understand)

McKesson does not invent medicines. Put simply, it runs the “healthcare logistics and behind-the-scenes operations” that make sure drugs reliably get to the places that need them. It moves huge volumes of pharmaceuticals from manufacturers to hospitals, pharmacies, and clinics, and it earns money by keeping that healthcare plumbing running without interruption.

Think of it like a “giant school lunch distribution center.” It does not grow the ingredients; it delivers large quantities every day to the schools that need them, on time, so lunch service never breaks down. In healthcare, the “ingredients” are “medicines,” and the destinations are “pharmacies, hospitals, and specialty clinics.”

Who are the customers?

The customer base broadly extends in two directions.

• The side that receives medicines and dispenses them to patients: large drugstore chains, community pharmacies, and healthcare providers such as hospitals and clinics
• The side that manufactures medicines and wants to sell them: pharmaceutical companies (especially those with high-priced, hard-to-handle “specialty drugs”)
• Adjacent areas: specialty clinic operating organizations such as oncology, and specialty clinic networks such as ophthalmology and retina

How does it make money? (Revenue model)

McKesson’s revenue can be grouped into three major streams.

• Distribution margin model: buy medicines in bulk, deliver them with inventory management and logistics included, and earn thin spreads and fees (the higher the volume, the stronger the model)
• Service/support fee model: fees for operational support for healthcare providers plus data and systems offerings (value tends to be higher in specialty domains)
• Specialty healthcare network-driven: grow specialty clinic networks and bundle medicines, services, and operational support into recurring revenue (a bigger focus in recent years)

Why is it chosen? (Value proposition)

The appeal is not flashy products—it is “scale” and “must-have reliability.”

• The ability to deliver needed medicines without stockouts (stockouts are unacceptable in healthcare)
• High throughput improves logistics and procurement efficiency
• In specialty areas such as oncology, it can deliver an integrated “distribution + operational support” solution, which tends to make switching painful

What is changing now: Business-structure updates and “future pillars”

If you describe McKesson only as “massive, low-margin distribution,” you miss what management is trying to do. In recent years, the company has shifted both its messaging and its investment priorities toward higher value-added areas. That context makes the long-term direction much easier to read.

Business-structure updates (organizational restructuring and portfolio focus)

• Bringing oncology + multi-specialty to the forefront: alongside scaled distribution, the company is elevating specialty domains as a distinct pillar, making the resource shift clearer—from “low-margin, scaled distribution” toward “higher value-added specialty domains”
• Intent to separate Medical-Surgical Solutions (medical consumables, etc.): a portfolio design that makes it easier to concentrate the core business on areas with better growth and profitability potential, such as oncology and biopharma

Future pillar ①: “Specialty healthcare platformization” centered on oncology

In oncology, McKesson is moving beyond simply moving product and into the operating systems that keep clinics running—practice operations, networks, and research/clinical trial support. In 2025, it stepped up investments and acquisitions in oncology operations and administrative support, tying them to network expansion.

• Oncology care is expensive and operationally complex, which makes back-office support especially valuable
• The larger the network, the more medicines, services, and data connect and reinforce one another
• At the same time, execution risk is high because acquisitions/integration, frontline operations, talent, and compliance all have to work

Future pillar ②: Expansion of specialty clinic networks such as ophthalmology and retina

The acquisition of PRISM Vision (an ophthalmology/retina clinic operations platform) is a step toward building a specialty platform in another domain. The key is that, versus drug distribution alone, McKesson can strengthen the value proposition as a “bundle” that includes operating know-how, intake capacity, pharma collaboration, and clinical research.

Future pillar ③: Technology and operational support that underpins prescribing and medical administration

McKesson also provides unglamorous but critical support—reducing errors, cutting administrative work, and smoothing billing and procedures. The more these tools are deployed alongside distribution, the easier it becomes to embed into day-to-day workflows.

“Behind-the-scenes infrastructure” that drives competitiveness

The advantage is not a product—it is a “system that doesn’t go down.”

• A massive logistics network and inventory management (the operational capability to move large volumes of medicines accurately)
• Specialty-drug handling capability (as temperature control and expiration management get more complex, switching becomes more painful)
• Know-how in supporting specialty clinics (once embedded, the system tends to stick)

The company “type” through long-term numbers: Revenue is steady, profits are more volatile

McKesson’s long-term fundamentals highlight a useful duality. Revenue tends to build steadily, while EPS (earnings per share) can swing sharply year to year, which can make the company’s “profile” look different depending on the period you focus on.

Long-term trends in revenue, EPS, and FCF (5-year/10-year shape)

• Revenue CAGR: past 5 years +9.2%, past 10 years +7.2% (revenue compounds over time)
• EPS CAGR: past 5 years +39.0%, past 10 years +15.1% (however, there was a large negative in FY2021, followed by a sharp recovery)
• FCF CAGR: past 5 years +6.2%, past 10 years +7.4% (cash is rising, but not accelerating as much as EPS)

The key takeaway is the structure of “revenue is relatively steady, while profits can swing materially.” Even though the business is closer to defensive infrastructure, profits can still be volatile, including due to accounting and capital-structure dynamics.

Margins and FCF margin: A low-margin, high-turnover model is the baseline

• Operating margin is generally around ~1% annually (reflecting the low-margin nature of wholesaling and logistics)
• FCF margin has recently been in the ~1.2%–1.7% range (FY2025 was 1.46%)

This setup—“huge revenue, thin margins, earn through velocity”—fits the business model.

ROE requires careful interpretation: Equity is negative

ROE for the latest FY is -158.9% (FY). However, since FY2021, shareholders’ equity (book value) has been negative, and BPS is also negative. In that situation, ROE does not cleanly reflect earnings power and should be treated cautiously for long-term comparisons (the right approach here is simply to acknowledge the figure as a fact).

Source of EPS growth: Share count reduction may be a major factor

The gap between revenue CAGR (past 5 years +9.2%) and EPS CAGR (past 5 years +39.0%) is wide, and it is very likely that a long-running decline in shares outstanding has contributed meaningfully. Shares outstanding fell from roughly 235 million in FY2015 to roughly 128 million in FY2025.

Lynch classification: Closest to “Cyclicals-leaning” (but not demand cyclicality—profit “appearance” is prone to swings)

In the classification flags based on the underlying dataset, McKesson is cyclical = true (others are false). The logic is not that demand moves up and down with the economy, but that profits (net income and EPS) can swing sharply year to year.

• FY2021 had a large negative EPS (-28.26), followed by a sharp rebound in FY2022–FY2025, with FY2025 at 25.72
• While the past 5-year EPS CAGR is high at +39.0%, revenue CAGR is only +9.2%, pointing to a structure where profits are more volatile
• With equity negative, ROE is negative (latest FY -158.9%), which can make the stock look less “steady” on the surface

Where it sits in the cycle (organized from the long-term series)

On an annual basis, the series shows a clear “loss → return to profit” inflection, with the rebound from the FY2021 deterioration starting in FY2022. Based on the long-term series alone, the positioning is a recovery to high-level phase after the bottom (FY2021).

That said, because this “cycle” may reflect profit volatility that includes accounting and one-off items rather than demand moving with the economy, it is important to validate the picture with near-term data.

Near-term (TTM / latest 8 quarters) momentum: The numbers are “accelerating,” but thin margins and a thin cash cushion run in parallel

Over the most recent year (TTM), EPS, revenue, and FCF are all strong and clearly above the 5-year average. Based on the dataset, the momentum call is Accelerating.

Most recent year (TTM): EPS, revenue, and FCF are all strong

• EPS (TTM) 32.42, YoY +65.29%
• Revenue (TTM) $387.094 billion, YoY +17.24%
• FCF (TTM) $6.171 billion, YoY +43.08% (FCF margin is 1.59%, consistent with the low-margin structure)

Linkage to the “long-term type”: What is maintained / points to watch

• Maintained: the low-margin structure (FCF margin 1.59%) remains intact and matches the business model
• Point to watch: revenue is also strong at +17.24%, which reads more like “structural accumulation” than economic cyclicality. The cyclical flag likely reflects “profit appearance can swing” more than “demand-driven” cyclicality
• ROE distortion continues: ROE for the latest FY is -158.87%, heavily skewed by negative equity

Also, when FY (annual) and TTM (latest 12 months) tell different “stories” on items like profit volatility and valuation metrics, it is best framed as differences in appearance due to different time windows. That is not a contradiction—different cuts can legitimately create different impressions.

Most recent 2 years (~8 quarters): An upward tendency is also visible, not just a one-off

• Most recent 2-year CAGR (TTM series): EPS +20.06%, revenue +13.31%, FCF +46.08%
• Trend correlation: EPS +0.72, revenue +0.99, FCF +0.69 (all point to an upward trend)

Financial health: Low leverage and strong interest coverage, but the cash cushion is not thick

To assess bankruptcy risk here, you have to look beyond thin margins and evaluate the debt load, interest service capacity, and liquidity (cash cushion) together.

Debt and interest-paying capacity (latest FY)

• Net Debt / EBITDA: 0.32x (within the past 5-year range; on the lower side over 10 years = leaning toward a more cash-flexible posture)
• Interest coverage: 18.03x (strong ability to service interest)

On these metrics, near-term growth does not appear to be the kind that “requires piling on debt to keep moving.” Separately, if external frictions such as regulation and litigation become drawn out, it is still worth watching for constraints on capital and management attention.

Liquidity (latest FY): Designed to run with thin working capital

• Quick ratio 0.53
• Cash ratio 0.09

This is not a balance sheet built to carry a large cash hoard; it is built to “make the model work by turning working capital.” As a result, shock resilience depends less on absolute cash and more on operational strength—inventory discipline, collections, payment terms, and supply continuity.

Shareholder returns (dividend positioning): Yield is low, but growth and safety have coexisted

McKesson’s dividend is best viewed as “present, but not the headline.” The latest TTM dividend yield is 0.377%, which is not compelling for income investors. But the growth rate and coverage tell a different story.

Where the yield stands (vs. historical averages)

• Dividend yield (TTM) 0.377%
• Past 5-year average 0.746%, past 10-year average 0.722% (currently below historical averages, reflecting factors such as share price appreciation)

DPS (dividend per share) growth

• 5-year CAGR +10.76%, 10-year CAGR +10.80%
• Most recent year (TTM) YoY +15.06%

Dividend safety (TTM)

• Payout ratio (earnings-based) 8.98% (past 5-year average 9.58%)
• FCF $6.171 billion, dividend burden vs. FCF 5.87%
• Dividend FCF coverage 17.05x

The dividend is light on both earnings and cash flow and is well covered. Still, in a thin-margin model, a structural caution is that cash-flow swings can translate into a relatively larger impact on dividend capacity.

Dividend track record (reliability)

• Dividend paid for 31 years
• 17 consecutive years of dividend increases
• The most recent dividend reduction/cut was in 2008

Note on peer comparison

Because this dataset does not include peer dividend distribution data, this report does not provide a numerical, definitive sector ranking (top/middle/bottom). With that caveat, healthcare distribution is defensive but typically not a classic high-dividend model, and McKesson similarly pairs a low yield with a low payout ratio and a light cash burden.

Investor Fit

• Income investors: with a 0.377% yield, it is unlikely to be owned primarily for dividends
• Total-return oriented: the dividend burden is small and does not appear to materially limit reinvestment capacity
• Overall assessment: a profile where shareholder returns should be judged not only through dividends but also through actions that reduce share count

Cash flow quality: EPS and FCF are growing differently (which is closer to the “core business reality”)

Over the long run, EPS growth has been substantial (past 5-year CAGR +39.0%), while FCF growth has stayed in the single digits (past 5-year CAGR +6.2%). This is not about “which is right,” but it is important to recognize that there can be stretches where reported earnings (EPS) and cash generation (FCF) do not move in lockstep.

In the latest TTM, FCF jumped +43.08% YoY, so cash is also strong in the near term. Given modest FCF growth over the past five years but a sharp move in the latest period, a high-value next step is to separate what is driven by one-offs versus working capital dynamics or the investment cycle.

Where valuation stands “today” (historical self-comparison only)

Here, without comparing to the market or peers, we place today’s valuation within McKesson’s own historical distribution (primarily the past 5 years, with the past 10 years as a supplement). The dataset assumes a stock price of $824.92.

PEG (valuation relative to growth)

• PEG 0.39
• Within the past 5-year range, toward the low end of the past 5 years, and below the past 10-year median (0.46)
• Over the past 2 years, positioned as flat to slightly rising

P/E (valuation relative to earnings)

• P/E (TTM) 25.45x
• Within the past 5-year range but near the upper end, and above the median even over the past 10 years
• Over the past 2 years, positioned as flat to slightly rising

Free cash flow yield (inverse metric)

• FCF yield (TTM) 6.06%
• Below the normal range over the past 5 years, and near the lower bound even over the past 10 years
• Over the past 2 years, positioned toward decline (direction of lower yield)

ROE (capital efficiency)

• ROE (latest FY) -158.87%
• Within the past 5-year range, but the range itself is extremely wide and highly distorted; below the lower bound of the normal range over the past 10 years
• Over the past 2 years, positioned as flat to worsening, with no indication of a move back into positive territory

FCF margin (quality of cash generation)

• FCF margin (TTM) 1.59%
• On the upper side of the normal range over the past 5 years, and within the range over the past 10 years (slightly below the median)
• Over the past 2 years, positioned as flat to slightly rising

Net Debt / EBITDA (inverse metric: lower indicates greater flexibility)

Net Debt / EBITDA is a metric where a smaller value (more negative) typically indicates a larger cash position and greater financial flexibility.

• Net Debt / EBITDA (latest FY) 0.32x
• On the lower side within the past 5-year range, and at a low level that is even below the lower bound of the normal range over the past 10 years (flexibility-leaning)
• Over the past 2 years, trending downward (direction of becoming smaller)

Summary when lining up the six metrics (positioning only)

P/E sits toward the high end of the past 5 years, and FCF yield has moved below the past 5-year range (= lower-yield positioning). Meanwhile, FCF margin is toward the upper end of its range, and Net Debt / EBITDA is low (flexibility-leaning). Because valuation optics and cash-generation quality/leverage are not pointing in the same direction, it is still worth confirming consistency by tying this back to the drivers of profit/cash variability (noise) and near-term momentum.

Why this company has won (the core of the success story)

McKesson’s core value proposition is straightforward: keep the pharmaceutical infrastructure running without interruption. Pharmaceutical distribution is one of those functions where, if it fails, healthcare delivery stalls; scale, operational consistency, regulatory compliance, and excellence in inventory and delivery are the real sources of value.

Importantly, this is not just trucking boxes. McKesson brings “behind-the-scenes design capability” that reduces friction in supply reliability and in administrative/operational workflows so pharmacies, hospitals, and specialty clinics can keep delivering care. The logistics footprint, regulatory capabilities, customer relationships, and operating know-how create barriers that are hard to replicate quickly.

Growth drivers (causal factors behind current growth)

• The core pharmaceutical distribution business grows with volume (prescription volume)
• Shift the center of gravity toward areas where value-add is easier to capture, such as oncology, multi-specialty, and biopharma services
• Expand specialty clinic operations/support and extend the value proposition into “operations, networks, and adjacent services”

These drivers fit the company’s “essential” role, but they also require acquisitions/integration, frontline execution, talent, and compliance—so differentiation is as much about “operational quality” as it is about “business positioning.”

What customers are likely to value (Top 3)

• Supply reliability (operational capability to minimize stockouts and delays)
• Operational stability and efficiency from scale (reducing the burden of ordering, delivery, and inventory management)
• Integrated provision of “distribution + operational support” in specialty domains (switching costs tend to rise)

What customers are likely to be dissatisfied with (Top 3)

• Rigidity in pricing and contract terms (negotiations are tougher for large customers)
• Process and support friction due to scale (slow decision-making, fragmented points of contact)
• Operational burden around system integration, billing, and data (unflashy, but it can become a frontline pain point)

Is the story still intact? (Consistency with recent moves)

Based on information since August 2025, McKesson has been articulating its growth narrative more explicitly around “oncology/multi-specialty” and “biopharma services,” while continuing to position “massive pharmaceutical distribution” as the foundation. It has reinforced that focus through organizational changes and has continued closing acquisitions (oncology support, ophthalmology/retina).

This reads less like a “pivot” and more like a tightening and sharpening of the original playbook—adding higher-value specialty capabilities and operational support on top of scaled, low-margin distribution.

Invisible Fragility: The stronger it looks, the more important it is to identify where it could break first

This is not a claim that anything is “wrong today.” Rather, because infrastructure businesses can look deceptively solid, this section focuses on the failure modes that can creep in gradually.

1) Bargaining power of large customers (skewed customer concentration)

In wholesaling, large customers often represent a meaningful share of volume, and the risk tends to show up less as revenue loss and more as margin pressure through renewals and term changes. Even if volume rises, if terms deteriorate and “quality” declines, revenue growth and earnings can diverge.

2) Price competition and service competition can progress simultaneously

In core wholesaling, differentiation often comes down to operational details. When competition heats up, “price/terms compression” and “higher costs to maintain service levels” can hit at the same time, which is especially painful in a low-margin model.

3) Specialty domains are an execution game (risk of losing differentiation)

Moving deeper into specialty domains has upside, but differentiation depends heavily on frontline operations, talent, integration, and compliance. If execution slips, the expected value-add may not show up, while integration costs still do. This risk often surfaces later as “it should be growing but isn’t / profits aren’t dropping to the bottom line,” rather than as a sudden break.

4) Supply chain dependence (supply-side conditions, pricing environment, operational burden)

If manufacturers’ supply conditions, procurement terms, or the assumptions behind inventory operations shift, the “cost of avoiding interruption” can rise, creating gradual pressure on the margin structure.

5) Deterioration in organizational culture (“the frontline that keeps things running” becomes fatigued)

Because value here comes from consistent daily execution, frontline fatigue, procedural overload, and heavier compliance burdens can spill into customer friction (slower responses, weaker exception handling), potentially weakening the company’s hand in contract negotiations.

6) Profitability deterioration (small deviations can be fatal in a low-margin model)

This model can create a frustrating mismatch—revenue grows, but what is retained does not—driven by higher logistics, labor, and IT costs plus competitive term pressure. The fact that FCF margin sits around 1% underscores how sensitive the economics are to this risk.

7) Deterioration in financial burden: “Litigation/regulation” can become the spark

While interest coverage is strong, pharmaceutical distribution comes with regulatory and litigation exposure. Opioid-related disputes can remain ongoing, and depending on developments, incremental burdens could emerge; that should be treated as a structural risk. The issue is less bankruptcy and more an “invisible cost” that can constrain capital, people, and management attention over time.

8) Industry structural change (disintermediation, direct sales, insourcing)

Over the long run, pressures could build that thin the take-rate available to wholesalers—large customers insourcing, manufacturers moving toward direct sales or redesigning distribution, and efficiency gains from data integration and automation. McKesson’s push toward specialty domains, operational support, and data utilization can be viewed as a defensive response to that pressure.

Competitive landscape: Who it competes with, and where the path to winning changes

McKesson is not competing to invent better drugs; it is competing to keep the healthcare supply chain running with minimal friction. That competition plays out in two layers.

• Core (wholesale/logistics): low-margin, differentiated by service quality and contract terms. Scale matters, but pricing pressure persists
• Value-added domains (specialty drugs, oncology, operational support, access support, data): the deeper the offering is embedded into operations and decision-making, the harder it is to replace, and profitability tends to look more like services

Key competitive players

• Cencora (formerly AmerisourceBergen): a direct competitor in logistics, specialty drugs, and manufacturer-facing services
• Cardinal Health: a major pharmaceutical distributor, working to improve efficiency and service quality through footprint expansion and automation
• Large retail pharmacy chains (CVS, Walgreens, etc.): less a wholesale competitor and more a powerful negotiating counterparty with purchasing leverage
• PBMs/insurers (CVS Caremark, Optum Rx, Express Scripts, etc.): architects that can influence how distribution economics are allocated
• Amazon Pharmacy, etc.: unlikely to replace national wholesalers overnight, but capable of reshaping parts of distribution from the patient-experience angle

Competition map by domain (where competition occurs)

• North American pharmaceutical wholesaling and daily delivery: supply reliability, delivery frequency, inventory visibility, regulatory compliance, contract terms
• Specialty/high-cost drugs (cold chain, etc.): temperature/expiration/traceability, error reduction, manufacturer-facing ancillary services
• Operational support in oncology/multi-specialty: competition among wholesalers extends into “frontline operations,” raising the execution bar
• Prescription access support / operational support: workflow embedding, data integration, compliance, post-implementation operational burden

Competition-related KPIs investors should monitor (as variables, not rankings)

• Terms (take-rate) at large-customer contract renewals and changes in service scope
• Growth in specialty-drug volume and operating KPIs such as stockouts, delays, and returns
• Expansion of operational support and network scale in areas such as oncology, and post-acquisition integration progress
• Signs of broader adoption of manufacturer-facing adjacent services (patient support, access support, data/research support)
• Content of logistics investment (facility expansion and automation) and its impact on service levels
• Whether progress in regulation and litigation is constraining costs, attention, and investment capacity

What is the moat (barriers to entry), and how durable is it?

McKesson’s moat is not proprietary tech; it is the combination of “scale × regulation × operations.”

• Core wholesale moat: a national logistics footprint, regulatory and audit capability, a large transaction base, and hard-to-replicate operating processes create real barriers. That said, among similarly scaled peers, the moat is less about monopoly power and more about “reliable execution within an oligopoly”
• Specialty-domain moat: as distribution is bundled with operational support, networks, and data, the replacement target shifts from “delivery” to a “system,” raising switching costs. However, it matters that competitors are investing in the same direction

Durability can be challenged during stretches of sustained contract-term compression and during prolonged regulatory/litigation responses that consume management bandwidth. Conversely, the more McKesson can expand offerings that touch frontline operations in specialty domains, the more it can shift the moat from “delivery” to “system.”

Will McKesson become stronger in the AI era? (Structural positioning)

In short, McKesson is positioned less as “a business AI replaces” and more as a business that “uses AI to improve efficiency and expand value-add” across healthcare logistics and specialty platforms.

Network effects: There are places where they appear and places where they do not

• Core logistics wholesaling is driven more by scale economies and operational quality than by network effects
• Prescription access support and specialty platforms can become more valuable as connections deepen and friction falls (moving toward a multi-sided market dynamic)

Data advantage: Value rises the closer oncology gets to “research-grade data”

In oncology, data becomes more valuable as real-world clinical and operational data can be converted into forms usable for research and decision-making. The company has indicated initiatives to use AI to structure unstructured data and improve the quality and speed of research-ready datasets—pointing to a shift from “data as a byproduct of distribution” toward “data as a core input to value-added services.”

AI integration: Embedding into frontline operations rather than flashy new products

The emphasis is on integrating AI into existing workflows—demand forecasting, inquiry handling, logistics automation, and reducing administrative friction. In specialty domains, the most direct leverage is often in data processing (unstructured → structured) to raise value-add.

AI substitution risk: Even if administration is automated, take-rate compression pressure remains

Routine administration is where AI-driven substitution is most likely, but that is more likely to show up as internal productivity gains. Meanwhile, as systems become more integrated, pressure can still persist to compress “the take-rate wholesalers can capture.” In that context, AI is less about magically transforming core wholesaling economics and more about defending the model and extending growth in specialty domains, data, and operational support.

Leadership and corporate culture: Infrastructure-like “discipline” and “integration capability” for specialty expansion are the watershed

CEO Brian Tyler has consistently emphasized shifting the center of gravity toward higher value-added areas such as oncology/multi-specialty and biopharma services, while protecting “always-on” pharmaceutical distribution. Since 2025, the company has also moved forward with organizational and portfolio refocusing, including changes to reporting segments.

Profile and values (within what can be abstracted from public information)

• Vision: protect always-on logistics while making high value-added specialty domains the center of growth
• Personality tendency: operations- and discipline-oriented; drives change without trying to be disruptive (builds on existing strengths)
• Values: treats compliance and ethics as cultural bedrock (codified as a code of conduct)
• Priorities: pursue focused investment without undermining supply reliability and regulatory compliance

How the culture manifests: Strengths and side effects

• Strengths: prioritizes standardization, controls, and repeatability—well suited to incident-avoidance operations
• Side effects: procedural overload, slower decisions, and frontline fatigue can translate into customer-experience friction

Because specialty expansion relies on acquisitions and integration, the long-term watershed is likely to be “whether it can integrate without degrading frontline operational quality.”

Two-minute Drill (the skeleton for long-term investing in two minutes)

McKesson is an infrastructure-style business that runs the “logistics and behind-the-scenes foundation” that keeps healthcare frontlines operating, and revenue tends to build steadily over time. At the same time, profits (EPS) can swing materially year to year, and with equity in negative territory, certain metrics like ROE can look distorted.

The core long-term question is whether McKesson can not only defend the low-margin distribution engine, but also embed itself deeper into specialty domains such as oncology through operational support, networks, and data—shifting what it sells from “delivery” to a “system” and improving take-rate quality. While the latest TTM shows accelerating EPS, revenue, and FCF, the low-margin reality (FCF margin around 1%) and the thin cash cushion (cash ratio 0.09) remain part of the package, which means investors should keep a close eye on sensitivity to small changes in contract terms and costs.