Sigma Healthcare Ltd (ASX: SIG) shares closed up 0.64% on Tuesday, trading for $3.17 apiece.
That sees shares in the S&P/ASX 200 Index (ASX: XJO) healthcare stock up a whopping 157% over the past 12 months.
Or enough to turn a $5,000 investment into $12,850 in just one year.
Some of those outsized gains were driven by Sigma's strong revenue and earnings growth reported for the 12 months to 31 January.
Investor interest has also been piqued by the company's long-running effort to merge with privately held Chemist Warehouse.
Finally, after more than a year of navigating through red tape, that merger became effective on 12 February.
Since market close on 12 February, Sigma Healthcare shares have continued to race ahead of the benchmark index, gaining 14.86% compared to the 1.5% loss posted by the ASX 200.
So, with this kind of strong outperformance already in the bag, is it too late to buy the newly merged healthcare giant?
Should I buy Sigma Healthcare shares today?
Despite sounding some positive notes on the company, Ord Minnett's Tony Paterno isn't ready to pull the trigger just yet (courtesy of The Bull).
"Sigma and Chemist Warehouse merged in February 2025," said Paterno, who has a hold recommendation on Sigma Healthcare shares. "The merge created a leading healthcare wholesaler, distributor and retail pharmacy franchisor."
According to Paterno:
Recent market capitalisation put the stock in the top 50 on the ASX. The main profit driver is Chemist Warehouse, which appears to be trading strongly. The shares have risen from $2.76 on March 12 to trade at $3.065 on May 22.
What's the latest from the ASX 200 healthcare stock?
On 20 March, Sigma reported its full-year results, which did not include its newly completed merger with Chemist Warehouse.
Among the highlights helping to boost Sigma Healthcare shares, the company reported a 50.9% year-on-year increase in revenue to $4.8 billion, partly driven by a supply contract from Chemist Warehouse that commenced in July.
And underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 79.3% to $93.8 million.
"Over the last three years we have executed our strategy to build scale, drive efficiencies, simplify our business and enhance our margin," Sigma Healthcare CEO Vikesh Ramsunder said of the full-year results.
Looking at what could impact Sigma Healthcare shares ahead, Ramsunder said:
Having concluded the merger, our management teams are focused on seamless integration and delivering long term value to shareholders. We have created a leading wholesaler and retail franchisor with strong growth potential in Australia and progressively internationally.
