MCK Relative Valuation
MCK's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, MCK is overvalued; if below, it's undervalued.
Historical Valuation
McKesson Corp (MCK) is now in the Overvalued zone, suggesting that its current forward PE ratio of 20.63 is considered Overvalued compared with the five-year average of 14.41. The fair price of McKesson Corp (MCK) is between 491.13 to 711.24 according to relative valuation methord. Compared to the current price of 859.72 USD , McKesson Corp is Overvalued By 20.88%.
Relative Value
Fair Zone
491.13-711.24
Current Price：859.72
20.88%
Overvalued
20.63
PE
1Y
3Y
5Y
Trailing
Forward
15.59
EV/EBITDA
McKesson Corp. (MCK) has a current EV/EBITDA of 15.59. The 5-year average EV/EBITDA is 10.88. The thresholds are as follows: Strongly Undervalued below 6.29, Undervalued between 6.29 and 8.58, Fairly Valued between 13.18 and 8.58, Overvalued between 13.18 and 15.48, and Strongly Overvalued above 15.48. The current Forward EV/EBITDA of 15.59 falls within the Strongly Overvalued range.
16.61
EV/EBIT
McKesson Corp. (MCK) has a current EV/EBIT of 16.61. The 5-year average EV/EBIT is 12.01. The thresholds are as follows: Strongly Undervalued below 7.33, Undervalued between 7.33 and 9.67, Fairly Valued between 14.35 and 9.67, Overvalued between 14.35 and 16.69, and Strongly Overvalued above 16.69. The current Forward EV/EBIT of 16.61 falls within the Overvalued range.
850.30
PS
McKesson Corp. (MCK) has a current PS of 850.30. The 5-year average PS is 9.70. The thresholds are as follows: Strongly Undervalued below -168.16, Undervalued between -168.16 and -79.23, Fairly Valued between 98.63 and -79.23, Overvalued between 98.63 and 187.56, and Strongly Overvalued above 187.56. The current Forward PS of 850.30 falls within the Strongly Overvalued range.
17.07
P/OCF
McKesson Corp. (MCK) has a current P/OCF of 17.07. The 5-year average P/OCF is 11.65. The thresholds are as follows: Strongly Undervalued below 6.37, Undervalued between 6.37 and 9.01, Fairly Valued between 14.29 and 9.01, Overvalued between 14.29 and 16.93, and Strongly Overvalued above 16.93. The current Forward P/OCF of 17.07 falls within the Strongly Overvalued range.
20.04
P/FCF
McKesson Corp. (MCK) has a current P/FCF of 20.04. The 5-year average P/FCF is 13.88. The thresholds are as follows: Strongly Undervalued below 7.89, Undervalued between 7.89 and 10.89, Fairly Valued between 16.87 and 10.89, Overvalued between 16.87 and 19.87, and Strongly Overvalued above 19.87. The current Forward P/FCF of 20.04 falls within the Strongly Overvalued range.
McKesson Corp (MCK) has a current Price-to-Book (P/B) ratio of -60.63. Compared to its 3-year average P/B ratio of -34.17 , the current P/B ratio is approximately 77.46% higher. Relative to its 5-year average P/B ratio of -107.19, the current P/B ratio is about -43.44% higher. McKesson Corp (MCK) has a Forward Free Cash Flow (FCF) yield of approximately 0.06%. Compared to its 3-year average FCF yield of 6.39%, the current FCF yield is approximately -99.04% lower. Relative to its 5-year average FCF yield of 8.66% , the current FCF yield is about -99.29% lower.
-60.63
P/B
Median3y
-34.17
Median5y
-107.19
0.06
FCF Yield
Median3y
6.39
Median5y
8.66
Competitors Valuation Multiple
The average P/S ratio for MCK's competitors is 253.40, providing a benchmark for relative valuation. McKesson Corp Corp (MCK) exhibits a P/S ratio of 850.30, which is 235.55% above the industry average. Given its robust revenue growth of 10.14%, this premium appears unsustainable.
P/S
P/E
EV/EBITDA
EV/EBIT
P/S
Revenue Growth
Market Cap
Performance Decomposition
1Y
3Y
5Y
Market capitalization of MCK increased by 36.07% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 0.31 to 1.13.
The secondary factor is the Revenue Growth, contributed 10.14%to the performance.
Overall, the performance of MCK in the past 1 year is driven by Margin Expansion. Which is more sustainable.
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