NasdaqGS:CERN

Stock Analysis Report

Executive Summary

Cerner Corporation provides health care information technology solutions and tech-enabled services in the United States and internationally.


Snowflake Analysis

Excellent balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Cerner's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CERN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.8%

CERN

-1.9%

US Healthcare Services

-1.2%

US Market


1 Year Return

35.6%

CERN

25.2%

US Healthcare Services

22.3%

US Market

Return vs Industry: CERN exceeded the US Healthcare Services industry which returned 28.6% over the past year.

Return vs Market: CERN exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

CERNIndustryMarket
7 Day-1.8%-1.9%-1.2%
30 Day1.6%3.3%1.6%
90 Day11.1%9.0%8.8%
1 Year36.7%35.6%25.5%25.2%25.0%22.3%
3 Year41.5%40.4%88.1%87.2%49.9%40.3%
5 Year13.1%12.2%66.2%64.6%77.6%58.0%

Price Volatility Vs. Market

How volatile is Cerner's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cerner undervalued compared to its fair value and its price relative to the market?

10.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CERN ($74.21) is trading below our estimate of fair value ($82.77)

Significantly Below Fair Value: CERN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CERN is good value based on its PE Ratio (47.2x) compared to the Healthcare Services industry average (63x).

PE vs Market: CERN is poor value based on its PE Ratio (47.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CERN is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: CERN is overvalued based on its PB Ratio (5.3x) compared to the US Healthcare Services industry average (3.7x).


Next Steps

Future Growth

How is Cerner forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

19.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CERN's forecast earnings growth (19.4% per year) is above the savings rate (1.7%).

Earnings vs Market: CERN's earnings (19.4% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: CERN's earnings are forecast to grow, but not significantly.

Revenue vs Market: CERN's revenue (5.1% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: CERN's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CERN's Return on Equity is forecast to be low in 3 years time (18.3%).


Next Steps

Past Performance

How has Cerner performed over the past 5 years?

6.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CERN has high quality earnings.

Growing Profit Margin: CERN's current net profit margins (9%) are lower than last year (15.7%).


Past Earnings Growth Analysis

Earnings Trend: CERN's earnings have grown by 6.9% per year over the past 5 years.

Accelerating Growth: CERN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CERN had negative earnings growth (-39.4%) over the past year, making it difficult to compare to the Healthcare Services industry average (0.6%).


Return on Equity

High ROE: CERN's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cerner's financial position?


Financial Position Analysis

Short Term Liabilities: CERN's short term assets ($2.2B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: CERN's short term assets ($2.2B) exceed its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: CERN's debt to equity ratio (23.5%) is considered satisfactory.

Reducing Debt: CERN's debt to equity ratio has increased from 4.3% to 23.5% over the past 5 years.

Debt Coverage: CERN's debt is well covered by operating cash flow (123.5%).

Interest Coverage: CERN earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: CERN has a high level of physical assets or inventory.

Debt Coverage by Assets: CERN's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

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

0.97%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage0.7%forecastin3Years0.6%

Current dividend yield vs market & industry

Notable Dividend: CERN's dividend (0.97%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: CERN's dividend (0.97%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether CERN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if CERN's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.9%), CERN's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CERN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

3.8yrs

Average management tenure


CEO

David Shafer (62yo)

1.9yrs

Tenure

US$9,699,361

Compensation

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 Phi ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD9.70M) is about average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Insufficient data to compare David's compensation with company performance.


Management Age and Tenure

3.8yrs

Average Tenure

58yo

Average Age

Experienced Management: CERN's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

1.3yrs

Average Tenure

63yo

Average Age

Experienced Board: CERN's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: CERN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$1,756,36220 Nov 19
Michael Nill
EntityIndividual
Shares25,772
Max PriceUS$68.15
SellUS$627,85520 Nov 19
John Peterzalek
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Client Officer
Shares9,211
Max PriceUS$68.24
SellUS$893,35116 Sep 19
Michael Nill
EntityIndividual
Shares13,124
Max PriceUS$68.07
SellUS$11,919,76710 Sep 19
Jeffrey Townsend
EntityIndividual
Shares176,354
Max PriceUS$67.59
SellUS$1,511,71406 Sep 19
Donald Trigg
EntityIndividual
Shares22,323
Max PriceUS$67.72
SellUS$1,629,35406 Sep 19
Marc Naughton
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares24,110
Max PriceUS$67.58
SellUS$654,52223 Aug 19
John Peterzalek
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Client Officer
Shares9,078
Max PriceUS$72.17
SellUS$569,38923 Aug 19
Julie Gerberding
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,928
Max PriceUS$71.82
SellUS$100,95413 Jun 19
William Zollars
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,400
Max PriceUS$72.11
SellUS$287,57403 Jun 19
Linda Dillman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,100
Max PriceUS$70.14
BuyUS$608,13002 May 19
John Greisch
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,000
Max PriceUS$67.57
BuyUS$499,77630 Apr 19
R. Wise
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,600
Max PriceUS$65.76

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Marc Naughton (64yo)

    Executive VP & CFO

    • Tenure: 24.2yrs
    • Compensation: US$3.35m
  • Randy Sims (58yo)

    Executive VP

    • Tenure: 22.8yrs
  • John Peterzalek (58yo)

    Executive VP & Chief Client Officer

    • Compensation: US$4.58m
  • David Shafer (62yo)

    Chairman & CEO

    • Tenure: 1.9yrs
    • Compensation: US$9.70m
  • Michael Battaglioli (51yo)

    VP & Chief Accounting Officer

    • Tenure: 10.7yrs
  • Allan Kells

    Vice President

    • Bill Graff

      Chief Information Officer

      • Tenure: 3.8yrs
    • Mike Robin

      Partner and Vice President

      • Tenure: 3.8yrs
    • Tracy Platt

      Executive VP & Chief Human Resources Officer

      • Tenure: 0.5yrs
    • Darrell Johnson

      Senior VP & Chief Marketing Officer

      • Tenure: 0.3yrs

    Board Members

    • Bill Zollars (71yo)

      Lead Independent Director

      • Tenure: 0.8yrs
      • Compensation: US$339.99k
    • Mitch Daniels (70yo)

      Independent Director

      • Tenure: 6.1yrs
      • Compensation: US$344.99k
    • Gary Bisbee (76yo)

      Independent Director

      • Tenure: 31.9yrs
      • Compensation: US$356.24k
    • R. Wise (54yo)

      Independent Director

      • Tenure: 0.8yrs
    • Linda Dillman (62yo)

      Independent Director

      • Tenure: 9.7yrs
      • Compensation: US$349.99k
    • John Greisch (64yo)

      Independent Director

      • Tenure: 0.8yrs
    • David Shafer (62yo)

      Chairman & CEO

      • Tenure: 1.9yrs
      • Compensation: US$9.70m
    • George Riedel (61yo)

      Independent Director

      • Tenure: 0.8yrs
    • Melinda Mount (60yo)

      Independent Director

      • Tenure: 0.8yrs
    • Julie Gerberding (64yo)

      Independent Director

      • Tenure: 2.8yrs
      • Compensation: US$342.49k

    Company Information

    Cerner Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Cerner Corporation
    • Ticker: CERN
    • Exchange: NasdaqGS
    • Founded: 1979
    • Industry: Health Care Technology
    • Sector: Healthcare
    • Market Cap: US$23.388b
    • Shares outstanding: 314.10m
    • Website: https://www.cerner.com

    Number of Employees


    Location

    • Cerner Corporation
    • 2800 Rockcreek Parkway
    • North Kansas City
    • Missouri
    • 64117
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    CERNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1986
    CREDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1986
    CERNSWX (SIX Swiss Exchange)YesCommon StockCHCHFDec 1986
    0R00LSE (London Stock Exchange)YesCommon StockGBUSDDec 1986
    CERN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1986
    CERNWBAG (Wiener Boerse AG)YesCommon StockATEURDec 1986
    CREETLX (Eurotlx)YesCommon StockITEURDec 1986

    Biography

    Cerner Corporation provides health care information technology solutions and tech-enabled 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 to aggregate, transform, and reconcile data across the continuum of care; and 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. Further, it provides tech-enabled services, such as implementation and training, remote hosting, operational management services, revenue cycle services, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs, and third-party administrator services; and complementary hardware and devices for third parties. The company serves integrated 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. It has a strategic collaboration with Christiana Care Health System to provide a weight loss surgery program. Cerner Corporation was founded in 1979 and is headquartered in North Kansas City, Missouri. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 23:33
    End of Day Share Price2020/01/24 00:00
    Earnings2019/09/28
    Annual Earnings2018/12/29


    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.