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Here's Why You Should Hold on to Cerner (CERN) Stock Now
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Cerner Corporation is well-poised for growth on the back of strategic deals and acquisitions. However, intense competition remains a concern.
Shares of this Zacks Rank #3 (Hold) have gained 30.1% in a year’s time against the industry’s decline of 50.5%. The S&P 500 Index has risen 13.4% in the same time frame.
The company — with a market capitalization of $27.47 billion — provides healthcare information technology (HCIT) solutions worldwide. It anticipates earnings to improve by 12.8% over the next five years. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 4.6%.
What’s Driving the Performance?
Cerner has strengthened its foothold in the HCIT space through both organic and inorganic means. The company plans to collaborate with leading companies and academic institutions to provide a wider portfolio of electronic health record (EHR) solutions.
The company has made substantial progress in its work with the Federal government, which includes expansion of interoperability capabilities that are important for the success of the VA and the Department of Defense (DoD) programs.
Image Source: Zacks Investment Research
Cerner follows a strategy of acquiring complementary businesses that enable the company to expand its solutions, device offerings and services, and grow its market and client base. Over the last few years, the acquisitions of Resource Systems, Clairvia, Anasazi Software, PureWellness, Labotix and InterMedHx have not only expanded Cerner’s product portfolio but have also helped improve its market share. Strategic acquisitions have aided the company in rapidly penetrating the HCIT market.
What’s Weighing on the Stock?
The market for HCIT solutions, devices and services is intensely competitive, rapidly evolving and subject to rapid technological change. The intensity of competition may put pressure on both pricing and margins. Stringent hospital budgets have further strained pricing.
Estimates Trend
The Zacks Consensus Estimate for 2022 revenues is pegged at $6.06 billion, indicating an improvement of 5.1% from the previous year’s reported number.
The same for adjusted earnings per share stands at $3.67, suggesting growth of 9.6% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 8.8% compares favorably with the industry’s 0.3%.
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #1.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.
McKesson surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20.6%. The company currently carries a Zacks Rank #2 (Buy).
McKesson’s long-term earnings growth rate is estimated at 11.8%. MCK’s earnings yield of 8.8% compares favorably with the industry’s 4.1%.
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Here's Why You Should Hold on to Cerner (CERN) Stock Now
Cerner Corporation is well-poised for growth on the back of strategic deals and acquisitions. However, intense competition remains a concern.
Shares of this Zacks Rank #3 (Hold) have gained 30.1% in a year’s time against the industry’s decline of 50.5%. The S&P 500 Index has risen 13.4% in the same time frame.
The company — with a market capitalization of $27.47 billion — provides healthcare information technology (HCIT) solutions worldwide. It anticipates earnings to improve by 12.8% over the next five years. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 4.6%.
What’s Driving the Performance?
Cerner has strengthened its foothold in the HCIT space through both organic and inorganic means. The company plans to collaborate with leading companies and academic institutions to provide a wider portfolio of electronic health record (EHR) solutions.
The company has made substantial progress in its work with the Federal government, which includes expansion of interoperability capabilities that are important for the success of the VA and the Department of Defense (DoD) programs.
Image Source: Zacks Investment Research
Cerner follows a strategy of acquiring complementary businesses that enable the company to expand its solutions, device offerings and services, and grow its market and client base. Over the last few years, the acquisitions of Resource Systems, Clairvia, Anasazi Software, PureWellness, Labotix and InterMedHx have not only expanded Cerner’s product portfolio but have also helped improve its market share. Strategic acquisitions have aided the company in rapidly penetrating the HCIT market.
What’s Weighing on the Stock?
The market for HCIT solutions, devices and services is intensely competitive, rapidly evolving and subject to rapid technological change. The intensity of competition may put pressure on both pricing and margins. Stringent hospital budgets have further strained pricing.
Estimates Trend
The Zacks Consensus Estimate for 2022 revenues is pegged at $6.06 billion, indicating an improvement of 5.1% from the previous year’s reported number.
The same for adjusted earnings per share stands at $3.67, suggesting growth of 9.6% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks from the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Henry Schein, Inc. (HSIC - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. AMN’s earnings yield of 8.8% compares favorably with the industry’s 0.3%.
Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 25.5%. The company currently carries a Zacks Rank #1.
Henry Schein’s long-term earnings growth rate is estimated at 11.8%. HSIC’s earnings yield of 5.6% compares favorably with the industry’s 4.1%.
McKesson surpassed earnings estimates in each of the trailing four quarters, the average surprise being 20.6%. The company currently carries a Zacks Rank #2 (Buy).
McKesson’s long-term earnings growth rate is estimated at 11.8%. MCK’s earnings yield of 8.8% compares favorably with the industry’s 4.1%.