Cerner Corp

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CERN : NASDAQ : Technology
$64.64 | %
Today's Range: 64.11 - 64.89
Avg. Daily Volume: 2,074,300
08/26/16 - 4:00 PM ET

Financial Analysis


CERNER CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CERNER CORP has strong liquidity. Currently, the Quick Ratio is 1.98 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.91% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)1215.961126.0
EBITDA ($mil)366.53335.36
EBIT ($mil)241.56222.29
Net Income ($mil)166.45115.04


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)629.89558.05
Total Assets ($mil)5779.555484.83
Total Debt ($mil)584.58622.76
Equity ($mil)4053.983863.99


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin45.8247.0
EBITDA Margin30.1429.78
Operating Margin19.8719.74
Sales Turnover0.810.71
Return on Assets10.99.16
Return on Equity15.5413.01
Debt Q2 FY16 Q2 FY15
Current Ratio2.372.42
Debt/Capital0.130.14
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)337.52344.85
Div / share0.00.0
EPS0.480.33
Book value / share12.0111.2
Institutional Own % n/a n/a
Avg Daily Volume2054223.02392384.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 122.18 for the Health Care Technology industry and a significant premium compared to the S&P 500 average of 25.30. For additional comparison, its price-to-book ratio of 5.42 indicates a significant premium versus the S&P 500 average of 2.83 and a discount versus the industry average of 5.57. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, CERNER CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CERN 35.99 Peers 122.18   CERN 18.22 Peers 24.10

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CERN is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CERN is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CERN 24.17 Peers 36.12   CERN 0.68 Peers 1.34

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CERN is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CERN trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CERN 5.42 Peers 5.57   CERN 25.69 Peers 22.82

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CERN is trading at a valuation on par with its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CERN is expected to have an earnings growth rate that exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CERN 4.72 Peers 5.72   CERN 19.77 Peers 54.62

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CERN is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CERN significantly trails its peers on the basis of sales growth

 

 

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