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Cerner Corp CERN

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Out With the Old, In With the New at Cerner; Raising FVE to $86 From $78

Soo Romanoff Equity Analyst

Analyst Note

| Soo Romanoff |

Wide-moat Cerner reported fourth-quarter results that were largely as expected. Revenue was slightly short of our expectations, which were on the high end of consensus (as listed by FactSet), with the larger-than-expected impact of divested businesses. Government contracts remain the core strength of the company’s growth strategy (about 15%) and are offsetting notable declines in the core business. The company is going through a notable shuffling of its executive team; emphasis remains on simplifying and improving the mix of services to better match the times by acquiring new technologies. We have already started to see improvements in mix and resulting increases in profitability. In reflecting these better results and fiscal 2021 guidance, we have increased our fair value estimate to $86 per share from $78.

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Company Profile

Business Description

Cerner is a leading supplier of healthcare information technology solutions and tech-enabled services. The company offers a wide range of intelligent solutions and tech-enabled services that support the clinical, financial, and operational needs of healthcare organizations of varying sizes. The company employs nearly 30,000 associates and has a strong global installed base, including the lion's share of the top 100 health systems, physician practices, laboratories, ambulatory centers, behavioral health centers, cardiac facilities, radiology clinics, surgery centers, extended-care facilities, retail pharmacies, and employer sites. The company is guided by the mission of the founding partners to provide seamless medical records across all healthcare providers to improve outcomes.

2800 Rockcreek Parkway
North Kansas City, MO, 64117
T +1 816 221-1024
Sector Healthcare
Industry Health Information Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 28, 2020
Stock Type Classic Growth
Employees 26,400