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Here's Why Investors Should Retain 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 21.5% in a year’s time against the industry’s decline of 45.2%. The S&P 500 Index has fallen 2% in the same time frame.
The company — with a market capitalization of $27.89 billion — provides healthcare information technology (HCIT) solutions worldwide. It anticipates earnings to improve 12.8% over the next five years. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 4.1%.
What’s Driving the Performance?
Cerner has strengthened its foothold in the HCIT space through 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 the expansion of interoperability capabilities that are important for the success of the U.S. Department of Veterans Affairs (VA) and the Department of Defense 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 to 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 $5.99 billion, indicating an improvement of 3.9% from the previous year’s reported number.
The same for adjusted earnings per share stands at $3.14, suggesting growth of 10.9% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Masimo Corporation (MASI - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 15.6%. The company currently sports a Zacks Rank #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 1.1%. The company’s earnings yield of 11.4% compares favorably with the industry’s (0.8%).
Masimo beat earnings estimates in each of the trailing four quarters, the average surprise being 4.4%. The company currently carries a Zacks Rank #2 (Buy).
Masimo’s estimated earnings growth rate for second-quarter 2022 is pegged at 22.3%. The company’s earnings yield is 3.8% against the industry’s (8.5%).
Patterson Companies surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 2.7%. The company currently carries a Zacks Rank #2.
Patterson Companies’ long-term earnings growth rate is estimated at 9.9%. The company’s earnings yield of 7.1% compares favorably with the industry’s 4.2%.
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Here's Why Investors Should Retain 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 21.5% in a year’s time against the industry’s decline of 45.2%. The S&P 500 Index has fallen 2% in the same time frame.
The company — with a market capitalization of $27.89 billion — provides healthcare information technology (HCIT) solutions worldwide. It anticipates earnings to improve 12.8% over the next five years. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 4.1%.
What’s Driving the Performance?
Cerner has strengthened its foothold in the HCIT space through 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 the expansion of interoperability capabilities that are important for the success of the U.S. Department of Veterans Affairs (VA) and the Department of Defense 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 to 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 $5.99 billion, indicating an improvement of 3.9% from the previous year’s reported number.
The same for adjusted earnings per share stands at $3.14, suggesting growth of 10.9% from the year-ago reported figure.
Stocks to Consider
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Masimo Corporation (MASI - Free Report) and Patterson Companies, Inc. (PDCO - Free Report) .
AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 15.6%. The company currently sports a Zacks Rank #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 1.1%. The company’s earnings yield of 11.4% compares favorably with the industry’s (0.8%).
Masimo beat earnings estimates in each of the trailing four quarters, the average surprise being 4.4%. The company currently carries a Zacks Rank #2 (Buy).
Masimo’s estimated earnings growth rate for second-quarter 2022 is pegged at 22.3%. The company’s earnings yield is 3.8% against the industry’s (8.5%).
Patterson Companies surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 2.7%. The company currently carries a Zacks Rank #2.
Patterson Companies’ long-term earnings growth rate is estimated at 9.9%. The company’s earnings yield of 7.1% compares favorably with the industry’s 4.2%.