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MDRX or CERN: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical Info Systems sector might want to consider either AllScripts Healthcare (MDRX - Free Report) or Cerner . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, AllScripts Healthcare has a Zacks Rank of #2 (Buy), while Cerner has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MDRX is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MDRX currently has a forward P/E ratio of 13.96, while CERN has a forward P/E of 27.07. We also note that MDRX has a PEG ratio of 1.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CERN currently has a PEG ratio of 1.99.

Another notable valuation metric for MDRX is its P/B ratio of 1.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CERN has a P/B of 5.14.

Based on these metrics and many more, MDRX holds a Value grade of A, while CERN has a Value grade of C.

MDRX stands above CERN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MDRX is the superior value option right now.


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