Cardinal Health Plummets 7.18% on $1.9B Solaris Acquisition and Revenue Miss—Is This a Buying Opportunity?

Summary
• Cardinal Health (CAH) plunges 7.18% to $146.34, its lowest since May 2023
• $1.9B Solaris Health acquisition and Q4 revenue miss drive sharp selloff
• Options chain shows 211% price change potential in 146-strike call

Cardinal Health’s stock imploded on Tuesday, sinking 7.18% to $146.34 amid a $1.9B acquisition of urology MSO Solaris Health and a Q4 revenue miss. The selloff, which saw shares trade as low as $137.75, has triggered a 2.66% turnover spike and a 36.03% implied volatility surge in options. With the stock now 7.18% below its 52-week high of $168.44, traders are scrambling to assess whether this is a panic-driven dip or a strategic rebalancing.

Solaris Acquisition and Revenue Miss Trigger Sharp Selloff
Cardinal Health’s 7.18% intraday drop stems from two catalysts: a $1.9B acquisition of Solaris Health and a Q4 revenue miss. The company announced the purchase of the urology MSO, which adds 750 providers to its platform, but the $60.16B revenue fell short of estimates due to OptumRx contract losses. While the acquisition is expected to be slightly accretive to non-GAAP EPS, the market reacted negatively to the $1.9B cash outlay and the 2.66% turnover spike. The stock’s 146.34 price point now sits 7.18% below its 52-week high, with the 200-day MA at $136.34 acting as a critical support level.

Health Care Services Sector Mixed as UnitedHealth Rises 3.7%
The Health Care Services sector showed divergent performance, with UnitedHealth Group (UNH) rising 3.7187% on Tuesday. Cardinal Health’s 7.18% drop contrasted sharply with UNH’s gains, highlighting sector fragmentation. While CAH’s acquisition of Solaris Health aims to bolster its urology platform, UNH’s strength suggests broader confidence in health services. However, CAH’s revenue miss and debt-funded Solaris deal have created a short-term overhang, making it a laggard in a sector otherwise buoyed by regulatory tailwinds.

Options and ETF Plays for CAH’s Volatile Rebound
• 200-day MA: 136.34 (below current price)
• RSI: 51.38 (neutral)
• MACD: -0.96 (bearish), Signal Line: -0.88 (bearish)
• Bollinger Bands: 161.38 (upper), 157.74 (middle), 154.10 (lower)

Cardinal Health’s technicals suggest a short-term bearish bias, with the 200-day MA at $136.34 and Bollinger lower band at $154.10 as key levels. The stock’s 51.38 RSI and negative MACD (-0.96) indicate oversold conditions but lack immediate bullish momentum. For options traders, the CAH20250822P140 put and CAH20250822C141 call offer high leverage and liquidity. The 140-strike put has a 31.31% IV and 168.29% leverage ratio, while the 141-strike call offers 22.63% leverage and 38.44% theta decay. Both contracts have high turnover (24,158 and 12,172) and moderate delta (-0.19 and 0.78), making them ideal for directional bets. A 5% downside to $139.02 would yield a 78.09% payoff for the 140 put and a 181.30% payoff for the 141 call. Aggressive bulls may consider CAH20250822C141 into a bounce above $141.30.

Backtest Cardinal Health Stock Performance
The performance of CAH after a -7% intraday plunge has historically shown positive short-to-medium-term gains. The backtest data indicates that the 3-Day win rate is 54.60%, the 10-Day win rate is 58.35%, and the 30-Day win rate is 63.98%, suggesting that CAH tends to recover and even exceed its pre-plunge levels in the following days.

Act Now: CAH at Pivotal Support Level as Sector Diverges
Cardinal Health’s 7.18% drop has created a critical juncture at the 200-day MA of $136.34 and Bollinger lower band of $154.10. While the Solaris acquisition and revenue miss triggered the selloff, the stock’s 19.81x PE and 2.66% turnover suggest potential for a rebound. Traders should monitor the 140-strike put and 141-strike call for high-leverage plays, while sector leaders like UnitedHealth (UNH, +3.7187%) offer a benchmark for broader health care sentiment. If CAH breaks below $136.34, the 125.92–127.12 200D support range becomes critical. Aggressive bulls may consider CAH20250822C141 into a bounce above $141.30.