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Cerner Teams with Global Capacity

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Global Capacity, a logistics and telecom data company, recently revealed a partnership with leading healthcare information technology (HCIT) solutions provider Cerner Corporation (CERN - Free Report) to implement Cerner Skybox Connect, which is an available private healthcare network.

The Cerner Skybox Connect supports the requirements of the healthcare business. This first-ever private network provides both network and procurement support, which ensures access to compliant healthcare know-how in a reliable, safe and efficient manner.

As per Cerner Corporation, the new network has exceeded expectations in a number of parameters, including reliability. Global Capacity stated that its network provides Cerner’s clients with access to an effective and economical communication network that allows network participants to work with each other.

The Cerner Skybox Connect Network is a phase-by-phase project which should be completed before the end of the current year. Cerner Skybox Connect will permit Cerner to provide the entire set of Cerner Skybox cloud services, including storage and remote desktop.  

Cerner remains the trend setter among pure-play, publicly traded healthcare IT (HCIT) vendors. We believe Cerner has positioned itself as one of the better placed clinical technology vendors to benefit from high HCIT spending over the next few years. The company is diversified not only on a global basis but serves both hospitals and ambulatory outfits. Its integrated solutions have captured market share. While greenfield opportunities are shrinking, the replacement market is growing.

We believe long-term investors may consider Cerner, which serves a sizeable installed hospital base. Its clients require composite clinically-focused applications complying with ‘meaningful use’ requirements and tackling coding challenges. The company has long-standing, integrated and seamless solutions for both inpatient and ambulatory settings.

On the negative side, the federal Stimulus program will gradually wind down. Cerner faces stiff competition from established HCIT players, such as Athenahealth (ATHN - Free Report) , Allscripts Healthcare Solutions (MDRX - Free Report) and Quality Systems (QSII - Free Report) and many others in a crowded field. The company is developing multiple growth drivers which will ensure its future growth.

We have a long-term Neutral recommendation on Cerner. The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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