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Cerner

Nasdaq:CERN
Snowflake Description

Excellent balance sheet with acceptable track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
CERN
Nasdaq
$21B
Market Cap
  1. Home
  2. US
  3. Healthcare
Company description

Cerner Corporation provides health care information technology solutions and services in the United States and internationally. The last earnings update was 50 days ago. More info.


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CERN Share Price and Events
Price Volatility
CERN
Industry
5yr Volatility vs Market

CERN Value

 Is Cerner undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Cerner to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Cerner.

NasdaqGS:CERN Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 21 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 10.2%
Perpetual Growth Rate 10-Year US Government Bond Rate 3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:CERN
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 3%
Equity Risk Premium S&P Global 7.1%
Healthcare Services Unlevered Beta Simply Wall St/ S&P Global 1.01
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.012 (1 + (1- 21%) (2.1%))
1.029
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.03
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.95% + (1.029 * 7.05%)
10.2%

Discounted Cash Flow Calculation for NasdaqGS:CERN using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Cerner is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:CERN DCF 1st Stage: Next 5 year cash flow forecast
2019 2020 2021 2022 2023
Levered FCF (USD, Millions) 763.22 949.07 1,102.65 1,282.30 1,457.75
Source Analyst x6 Analyst x3 Analyst x2 Analyst x2 Est @ 13.68%
Present Value
Discounted (@ 10.2%)
692.56 781.47 823.88 869.40 896.86
Present value of next 5 years cash flows $4,064.16
NasdaqGS:CERN DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2023 × (1 + g) ÷ (Discount Rate – g)
= $1,457.75 × (1 + 2.95%) ÷ (10.2% – 2.95%)
$20,692.46
Present Value of Terminal Value = Terminal Value ÷ (1 + r)5
= $20,692.46 ÷ (1 + 10.2%)5
$12,730.68
NasdaqGS:CERN Total Equity Value
Calculation Result
Total Equity Value = Present value of next 5 years cash flows + Terminal Value
= $4,064.16 + $12,730.68
$16,794.85
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $16,794.85 / 329.00
$51.05
NasdaqGS:CERN Discount to Share Price
Calculation Result
Value per share (USD) From above. $51.05
Current discount Discount to share price of $63.82
= -1 x ($63.82 - $51.05) / $51.05
-25%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Cerner is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Cerner's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Cerner's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:CERN PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-06-30) in USD $2.54
NasdaqGS:CERN Share Price ** NasdaqGS (2018-09-21) in USD $63.82
United States of America Healthcare Services Industry PE Ratio Median Figure of 12 Publicly-Listed Healthcare Services Companies 59.49x
United States of America Market PE Ratio Median Figure of 3,049 Publicly-Listed Companies 20.14x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Cerner.

NasdaqGS:CERN PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:CERN Share Price ÷ EPS (both in USD)

= 63.82 ÷ 2.54

25.11x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cerner is good value based on earnings compared to the US Healthcare Services industry average.
  • Cerner is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Cerner's expected growth come at a high price?
Raw Data
NasdaqGS:CERN PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 25.11x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 21 Analysts
14.2%per year
United States of America Healthcare Services Industry PEG Ratio Median Figure of 10 Publicly-Listed Healthcare Services Companies 2.6x
United States of America Market PEG Ratio Median Figure of 2,046 Publicly-Listed Companies 1.4x

*Line of best fit is calculated by linear regression .

NasdaqGS:CERN PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 25.11x ÷ 14.2%

1.77x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cerner is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Cerner's assets?
Raw Data
NasdaqGS:CERN PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-06-30) in USD $14.83
NasdaqGS:CERN Share Price * NasdaqGS (2018-09-21) in USD $63.82
United States of America Healthcare Services Industry PB Ratio Median Figure of 37 Publicly-Listed Healthcare Services Companies 4.3x
United States of America Market PB Ratio Median Figure of 5,244 Publicly-Listed Companies 2.02x
NasdaqGS:CERN PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:CERN Share Price ÷ Book Value per Share (both in USD)

= 63.82 ÷ 14.83

4.3x

* Primary Listing of Cerner.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cerner is good value based on assets compared to the US Healthcare Services industry average.
X
Value checks
We assess Cerner's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Healthcare Services industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Healthcare Services industry average (and greater than 0)? (1 check)
  5. Cerner has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

CERN Future Performance

 How is Cerner expected to perform in the next 1 to 3 years based on estimates from 21 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
14.2%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Cerner expected to grow at an attractive rate?
  • Cerner's earnings growth is expected to exceed the low risk savings rate of 3%.
Growth vs Market Checks
  • Cerner's earnings growth is positive but not above the United States of America market average.
  • Cerner's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:CERN Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:CERN Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 21 Analysts 14.2%
NasdaqGS:CERN Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 21 Analysts 9.4%
United States of America Healthcare Services Industry Earnings Growth Rate Market Cap Weighted Average 27.9%
United States of America Healthcare Services Industry Revenue Growth Rate Market Cap Weighted Average 12.7%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 16.6%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.8%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:CERN Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 21 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:CERN Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 7,914 2,083 1,326 3
2021-12-31 7,279 1,813 1,141 3
2020-12-31 6,426 1,600 951 9
2019-12-31 5,857 1,486 815 21
2018-12-31 5,419 1,446 714 21
NasdaqGS:CERN Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-06-30 5,149 1,421 843
2018-03-31 5,073 1,413 854
2017-12-30 5,041 1,308 867
2017-09-30 5,037 1,297 680
2017-07-01 4,948 1,245 673
2017-04-01 4,849 1,213 659
2016-12-31 4,708 1,246 636
2016-10-01 4,633 1,261 653
2016-07-02 4,579 1,221 630
2016-04-02 4,494 1,069 579
2016-01-02 4,352 1,040 539
2015-10-03 4,103 818 521
2015-07-04 3,812 766 503

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Cerner's earnings are expected to grow by 14.2% yearly, however this is not considered high growth (20% yearly).
  • Cerner's revenue is expected to grow by 9.4% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:CERN Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 21 Analyst Estimates (S&P Global) See Below

All data from Cerner Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CERN Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31 4.31 4.51 4.10 2.00
2021-12-31 3.61 3.89 3.33 2.00
2020-12-31 2.84 3.40 2.45 4.00
2019-12-31 2.41 3.00 2.20 13.00
2018-12-31 2.10 2.37 1.96 13.00
NasdaqGS:CERN Past Financials Data
Date (Data in USD Millions) EPS *
2018-06-30 2.54
2018-03-31 2.57
2017-12-30 2.62
2017-09-30 2.05
2017-07-01 2.02
2017-04-01 1.97
2016-12-31 1.88
2016-10-01 1.92
2016-07-02 1.85
2016-04-02 1.69
2016-01-02 1.57
2015-10-03 1.52
2015-07-04 1.47

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Cerner is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Cerner's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Cerner has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

CERN Past Performance

  How has Cerner performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Cerner's growth in the last year to its industry (Healthcare Services).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Cerner's year on year earnings growth rate has been positive over the past 5 years.
  • Cerner's 1-year earnings growth exceeds its 5-year average (25.4% vs 15.3%)
  • Cerner's earnings growth has not exceeded the US Healthcare Services industry average in the past year (25.4% vs 44.2%).
Earnings and Revenue History
Cerner's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Cerner Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CERN Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-06-30 5,148.92 843.44 2,742.29 646.21
2018-03-31 5,073.18 853.77 2,665.74 620.76
2017-12-30 5,040.81 866.98 2,632.09 605.05
2017-09-30 5,037.07 680.01 2,573.80 588.54
2017-07-01 4,947.56 672.57 2,524.74 571.46
2017-04-01 4,849.42 659.34 2,481.01 563.79
2016-12-31 4,707.93 636.48 2,424.38 551.42
2016-10-01 4,632.81 652.90 2,378.46 546.71
2016-07-02 4,579.44 630.20 2,334.30 542.77
2016-04-02 4,493.52 578.79 2,263.99 546.06
2016-01-02 4,352.47 539.36 2,170.02 539.80
2015-10-03 4,103.40 521.13 2,024.13 505.44
2015-07-04 3,811.85 502.85 1,870.84 469.66
2015-04-04 3,526.64 516.84 1,724.84 428.53
2015-01-03 3,312.82 525.43 1,612.96 392.81
2014-09-27 3,181.14 437.62 1,659.41 378.34
2014-06-28 3,074.88 423.97 1,613.13 364.31
2014-03-29 2,939.30 407.84 1,552.17 349.27
2013-12-28 2,840.64 398.35 1,468.43 338.79
2013-09-28 2,760.62 450.10 1,322.41 324.97
2013-06-29 2,711.67 433.64 1,267.51 320.06
2013-03-30 2,645.86 418.56 1,214.76 311.29
2012-12-29 2,610.13 397.23 1,184.21 301.37
2012-09-29 2,517.72 376.62 1,138.53 296.07
2012-06-30 2,415.68 356.56 1,095.65 290.52
2012-03-31 2,306.81 330.78 1,063.36 286.80
2011-12-31 2,158.46 306.63 1,014.88 286.80
2011-10-01 2,045.58 286.07 973.49 284.31

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Cerner has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Cerner used its assets more efficiently than the US Healthcare Services industry average last year based on Return on Assets.
  • Cerner's use of capital has not improved over the past 3 years (Return on Capital Employed).
X
Past performance checks
We assess Cerner's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Healthcare Services industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Cerner has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

CERN Health

 How is Cerner's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Cerner's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Cerner is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Cerner's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Cerner's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 5.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Cerner Company Filings, last reported 2 months ago.

NasdaqGS:CERN Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-06-30 4,878.85 440.92 885.56
2018-03-31 4,900.49 445.58 921.36
2017-12-30 4,785.35 526.72 805.77
2017-09-30 4,564.00 535.00 852.05
2017-07-01 4,355.50 543.42 636.99
2017-04-01 4,112.88 550.15 531.91
2016-12-31 3,927.95 563.75 356.45
2016-10-01 4,278.04 572.54 692.68
2016-07-02 4,053.98 584.58 629.89
2016-04-02 3,916.33 595.44 503.45
2016-01-02 3,870.38 605.15 513.18
2015-10-03 3,837.33 630.67 464.54
2015-07-04 3,863.99 622.76 558.05
2015-04-04 3,710.42 626.17 684.16
2015-01-03 3,565.97 130.33 1,420.87
2014-09-27 3,396.21 146.80 1,331.76
2014-06-28 3,259.77 155.37 988.79
2014-03-29 3,246.40 160.48 1,031.26
2013-12-28 3,167.66 165.82 879.38
2013-09-28 3,077.39 182.90 921.83
2013-06-29 2,951.01 181.90 969.52
2013-03-30 2,899.24 182.38 1,005.15
2012-12-29 2,833.65 196.14 1,036.79
2012-09-29 2,696.68 196.66 1,039.00
2012-06-30 2,568.52 176.08 980.00
2012-03-31 2,443.85 152.63 893.84
2011-12-31 2,310.80 126.54 774.78
2011-10-01 2,207.35 133.84 755.21
  • Cerner's level of debt (9%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (6.2% vs 9% today).
  • Debt is well covered by operating cash flow (322.2%, greater than 20% of total debt).
  • Cerner earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Cerner's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Cerner has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

CERN Dividends

 What is Cerner's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Cerner dividends.
If you bought $2,000 of Cerner shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Cerner's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Cerner's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:CERN Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 21 Analyst Estimates (S&P Global) See Below
Global Healthcare Services Industry Average Dividend Yield Market Cap Weighted Average of 13 Stocks 1.3%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1973 Stocks 2.6%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.7%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.3%
United States of America Top 25% Dividend Yield 75th Percentile 3.3%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:CERN Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31
2021-12-31
2020-12-31 0.00 3.00
2019-12-31 0.00 4.00
2018-12-31 0.00 4.00

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Cerner has not reported any payouts.
  • Unable to verify if Cerner's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Cerner's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Cerner has not reported any payouts.
Future Payout to shareholders
  • No need to calculate the sustainability of Cerner's dividends in 3 years as they are not expected to pay a notable one for United States of America.
X
Income/ dividend checks
We assess Cerner's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.7%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Cerner afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Cerner has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

CERN Management

 What is the CEO of Cerner's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
David Shafer, image provided by Google.
David Shafer
AGE 61
TENURE AS CEO 0.6 years
CEO Bio

Mr. David Brent Shafer serves as Chairman and Chief Executive Officer at Cerner Corporation since Febraury 1, 2018. Mr. Shafer served as Executive Vice President of North American Market at Koninklijke Philips N.V. since July 29, 2016. Mr. Shafer served as the Chief Executive Officer of Philips Electronics North America Corporation since February 2014 until July 29, 2016. Mr. Shafer corporate responsibilities includes: Strengthening culture of entrepreneurship and growing revenue and market share in the United States and Canada. He has strong market and business experience to the role through various senior leadership positions with Philips and other companies including GE, Johnson & Johnson, Intermountain Healthcare Primary Children’s, Inc. and Hewlett-Packard. Mr. Shafer served as the Chief Executive Officer of the Global Business -Philips Home Healthcare Solutions of Murrysville at Koninklijke Philips N.V. since May 3, 2010 until May 2014, where he improved the value of the portfolio and broadened the business group into new markets. He was with Philips Medical Systems International B.V. since 2005. He served as Unit Chief Executive Officer of Philips Medical Systems International B.V. since May 19, 2005. Mr. Shafer served as President and Chief Executive Officer of Global Sales and Service Business for Philips Healthcare. He served as an Executive Vice President of North America Region of Philips Medical Systems International B.V. from May 19, 2005 to May 2010 and served as its President of North America Region until May 2010. He served as Head of North America Sales and Service Division at Philips Medical Systems International B.V. He served as Chief Executive Officer of the North America region for Royal Philips Electronics from January 2009 until May 2010. He served as Vice President and General Manager of Patient Care Environment Division for Hill-Rom Company, Inc. Previously, he served HILL-ROM as Vice President of the Americas and Asia Pacific sales divisions. He began his career with Johnson & Johnson (Critikon Division) and worked for Hewlett-Packard Medical Products Group in several key sales management positions. In 1996, he joined GE Medical Systems, where he held various sales, marketing and general management positions, including in X-ray and cardiology. Mr. Shafer serves as a Member of Board of Governors at National Electrical Manufacturers Association.

CEO Compensation
  • Insufficient data for David to compare compensation growth.
  • Insufficient data for David to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Cerner management team in years:

6.2
Average Tenure
54
Average Age
  • The average tenure for the Cerner management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Cliff Illig

TITLE
Co-Founder & Vice Chairman
COMPENSATION
$3M
AGE
67

Zane Burke

TITLE
President
COMPENSATION
$9M
AGE
52
TENURE
5 yrs

Marc Naughton

TITLE
Executive VP & CFO
COMPENSATION
$6M
AGE
63
TENURE
22.8 yrs

Mike Nill

TITLE
Executive VP & COO
COMPENSATION
$9M
AGE
53
TENURE
7.3 yrs

Jeff Townsend

TITLE
Executive VP & Chief of Innovation
COMPENSATION
$9M
AGE
54
TENURE
20.5 yrs

David Shafer

TITLE
Chairman & CEO
AGE
61
TENURE
0.6 yrs

Mike Robin

TITLE
Partner and Vice President
TENURE
2.4 yrs

Michael Battaglioli

TITLE
VP & Chief Accounting Officer
AGE
50
TENURE
9.3 yrs

Bill Graff

TITLE
Chief Information Officer
TENURE
2.4 yrs

Allan Kells

TITLE
Vice President
Board of Directors Tenure

Average tenure and age of the Cerner board of directors in years:

7.3
Average Tenure
68
Average Age
  • The tenure for the Cerner board of directors is about average.
Board of Directors

David Shafer

TITLE
Chairman & CEO
AGE
61
TENURE
0.6 yrs

Gary Bisbee

TITLE
Director
COMPENSATION
$352K
AGE
75
TENURE
30.6 yrs

Cliff Illig

TITLE
Co-Founder & Vice Chairman
COMPENSATION
$3M
AGE
67
TENURE
0.6 yrs

Linda Dillman

TITLE
Director
COMPENSATION
$350K
AGE
61
TENURE
8.3 yrs

Mitch Daniels

TITLE
Lead Director
COMPENSATION
$345K
AGE
69

Bill Zollars

TITLE
Director
COMPENSATION
$337K
AGE
70
TENURE
13.3 yrs

Denis Cortese

TITLE
Director
COMPENSATION
$336K
AGE
74
TENURE
7.3 yrs

Julie Gerberding

TITLE
Director
COMPENSATION
$564K
AGE
63
TENURE
1.5 yrs
Recent Insider Trading
  • Cerner insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Cerner's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Cerner has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

CERN News

External News
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Simply Wall St News

Is Cerner Corporation (NASDAQ:CERN) As Strong As Its Balance Sheet Indicates?

Investors looking for stocks with high market liquidity and little debt on the balance sheet should consider Cerner Corporation (NASDAQ:CERN). … With a market valuation of US$21.52b, CERN is a safe haven in times of market uncertainty due to its strong balance sheet. … In times of low liquidity in the market, these firms won’t be left high and dry.

Simply Wall St -

Why Are Insiders Bearish About Cerner Corporation's (NASDAQ:CERN) Stock?

large-cap stock … It is widely considered that insider selling stock in their own companies is potentially a bearish signal … A research published in The MIT Press (1998) concluded that stocks following insider selling fell 2.7% compared to the market

Simply Wall St -

Is Cerner Corporation (NASDAQ:CERN) A Cash Cow?

If you are currently a shareholder in Cerner Corporation (NASDAQ:CERN), or considering investing in the stock, you need to examine how the business generates cash, and how it is reinvested. … I’ve analysed below, the health and outlook of Cerner’s cash flow, which will help you understand the stock from a cash standpoint. … Free cash flow (FCF) is the amount of cash Cerner has left after it pays off its expenses, including its net capital expenditures, which is what the company needs to spend each year to maintain or grow its business operations.

Simply Wall St -

Will Cerner Corporation's (NASDAQ:CERN) Earnings Grow Over The Next Year?

Since Cerner Corporation (NASDAQ:CERN) released its earnings in March 2018, … with profits predicted to drop by -14.18% next year … the past 5-year average growth rate of 14.34%.

Simply Wall St -

Does Cerner Corporation's (NASDAQ:CERN) July Stock Price Reflect Its Future Growth?

Cerner Corporation (NASDAQ:CERN) is considered a high-growth stock, but its last closing price of $60.8 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … Check out our latest analysis for Cerner? … Investors in Cerner have been patiently waiting for the uptick in earnings.

Simply Wall St -

What Should You Know About Cerner Corporation's (NASDAQ:CERN) Return On Capital?

Your equity share is granted in return for the capital provided to the business to operate, and in order for an investment to be successful the business has to create earnings from the funds that make up this capital. … You need to pay attention to this because your return on investment is linked to dividends and internal investments to improve the business, which can only occur if the company is expected to produce adequate earnings with the capital that has been provided. … Thus, to understand how your money can grow by investing in Cerner, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE)

Simply Wall St -

Is Cerner Corporation (NASDAQ:CERN) Attractive At Its Current PE Ratio?

The content of this article will benefit those of you who are starting to educate yourself about investing in the stock market. … and want to better understand how you can grow your money by investing in Cerner Corporation (NASDAQ:CERN). … Cerner Corporation (NASDAQ:CERN) is trading with a trailing P/E of 23.9x, which is lower than the industry average of 45.2x.

Simply Wall St -

Should You Be Tempted To Sell Cerner Corporation (NASDAQ:CERN) At Its Current PE Ratio?

CERN is priced at a multiple of 22.89x based on its prior year’s earnings,. … which is -186.28521781227363 lower than 42.86x average multiple of the Healthcare Services. … Yes, this cheaper multiple can initially be attractive, but there are many company-specific elements which are not captured in such a static ratio – such as its growth outlook and debt obligations

Simply Wall St -

Is Cerner Corporation's (NASDAQ:CERN) Balance Sheet A Threat To Its Future?

the key to extending previous success is in the health of the company’s financials. … I will provide an overview of Cerner’s financial liquidity and leverage to give you an idea of Cerner’s position to take advantage of potential acquisitions or comfortably endure future downturns … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself

Simply Wall St -

Cerner Corporation (NASDAQ:CERN): What Is Driving Earnings Margins?

Margin Calculation for CERN Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 853.77 Million ÷ 5.07 Billion = 16.83% The past five years have seen Cerner's margin remain stable, due to a 14.52% average growth in net income, remaining within range of average revenue growth of 14.53% which means that a relatively consistent portion of revenue has fallen to the bottom line. … This suggests future earnings growth is driven further by enhanced cost efficiency alongside revenue increases, which is enlarging the incremental amount of net income that is retained from the forecasted revenue growth. … Thus, it is essential to run your own analysis on Cerner's future earnings whilst maintaining a watchful eye over the sustainability of their cost management methods and the runway for top line growth.

Simply Wall St -

CERN Company Info

Map
Description

Cerner Corporation provides health care information technology solutions and services in the United States and internationally. The company offers Cerner Millennium architecture, a person-centric computing framework, which includes clinical, financial, and management information systems that allow providers to access an individual’s electronic health record (EHR) at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers. It also provides HealtheIntent platform, a cloud-based platform that enables organizations to aggregate, transform, and reconcile data across the continuum of care, as well as EHR agnostic platform, CareAware, that facilitates connectivity of health care devices to EHRs. In addition, the company offers a portfolio of clinical and financial health care information technology solutions, as well as departmental, connectivity, population health, and care coordination solutions; and various complementary services, including support, hosting, managed, implementation, and strategic consulting services. Further, it provides various services, such as implementation and training, remote hosting, operational management, revenue cycle, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs, and third party administrator services for employer-based health plans; and complementary hardware and devices for third parties. It serves integrated delivery networks, physician groups and networks, managed care organizations, hospitals, medical centers, reference laboratories, home health agencies, blood banks, imaging centers, pharmacies, pharmaceutical manufacturers, employers, governments, and public health organizations. Cerner Corporation was founded in 1979 and is headquartered in North Kansas City, Missouri.

Details
Name: Cerner Corporation
CERN
Exchange: NasdaqGS
Founded: 1979
$20,997,058,957
329,004,371
Website: http://www.cerner.com
Address: Cerner Corporation
2800 Rockcreek Parkway,
North Kansas City,
Missouri, 64117,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS CERN Common Stock Nasdaq Global Select US USD 05. Dec 1986
DB CRE Common Stock Deutsche Boerse AG DE EUR 05. Dec 1986
LSE 0R00 Common Stock London Stock Exchange GB USD 05. Dec 1986
SWX CERN Common Stock SIX Swiss Exchange CH CHF 05. Dec 1986
WBAG CERN Common Stock Wiener Boerse AG AT EUR 05. Dec 1986
BMV CERN * Common Stock Bolsa Mexicana de Valores MX MXN 05. Dec 1986
Number of employees
Current staff
Staff numbers
26,000
Cerner employees.
Industry
Health Care Technology
Healthcare
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/09/22 21:03
End of day share price update: 2018/09/21 00:00
Last estimates confirmation: 2018/09/13
Last earnings filing: 2018/08/03
Last earnings reported: 2018/06/30
Last annual earnings reported: 2017/12/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.