Barron's Article Comments on Cerner (CERN); Suggests Buying on Dips as Upswing in Hospital Spending Should Boost Shares

May 18, 2009 1:59 PM EDT

Barron's article makes comments on Cerner (Nasdaq: CERN), suggesting cautious investors buy the stock on any dips, and long-term, the stock should continue to gain momentum as hospitals switch to electronic records.

Positive Points From The Article Include:

1) Federal stimulus package, which includes billions of dollars of incentives to promote a more widespread use of health-care IT, including upgrade to electronic medical records.

2) William Blair analyst making positive comments. Piper Jaffray analyst recently raising his price target on CERN to $78.

3) Cerner has strong presence in electronic records and order entry. The Company generates approx. 15% of its $1.7 billion of revenue from selling licensed software (developed in-house) for electronic medical-record and order- entry systems.


Negative Points From The Article Include:

1) Q1 financial report was decent, but revenues were hurt by hospitals' cutting back on capital spending.

2) Shares look pricey, trading at 22.8x this year's estimate of $2.41 a share.

Cerner Corporation (Cerner) is a supplier of healthcare information technology (HIT) solutions, healthcare devices and related services.

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Analyst Comments

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Related Entities

• Piper Jaffray
• William Blair
• Barron's

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