Cantor Fitzgerald Believes Cerner Corp (NASDAQ: CERN) Still Has Room to Grow

By Jason Carr

Cantor Fitzgerald analyst Steven Halper reiterated a Buy rating on Cerner Corp (NASDAQ: CERN) today and set a price target of $77. The company’s shares opened today at $67.63, close to its 52-week high of $69.28.

Halper observed:

“VA to adopt Millenium. On Monday, June 5, U.S. Secretary of Veterans Affairs Dr. David J. Shulkin announced his decision to replace the Veterans Health Information Systems and Technology Architecture or VistA EHR with Cerner. VA clinicians started developing an EHR system in the 1970s which has led to VistA, the primary healthcare IT system that the VA has in place today. VistA needed to be modernized to better address cyber security challenges and keep pace with the innovations in healthcare IT. Cerner indicated in an email to the investment community that it is still early in the process and will need to negotiate a contract and choose its partners. In our view, we expect the company will not recognize the contract as bookings until 4Q17, at the earliest. DoD implementation ongoing. The DoD system, known as MHS GENESIS, is based on Cerner Millennium. MHS Genesis is currently being implemented. Cerner, along with its partners, was awarded this contract in 2015. Cerner partnered with defense computing contractor Leidos and Accenture Federal Services. We note that the DoD contract is mostly a software deal for Cerner with most implementation services being provided by Cerner’s partners. The DoD win clearly put Cerner in a strong position to win the VA contract. Part of the rationale, as stated in the VA announcement, was to put the DoD and the VA on a common platform and achieve interoperability.”

According to TipRanks.com, Halper is a top 100 analyst with an average return of 21.5% and a 76.0% success rate. Halper covers the Technology sector, focusing on stocks such as Castlight Health, Quality Systems, and Evolent Health.

Currently, the analyst consensus on Cerner Corp is Moderate Buy and the average price target is $68.30, representing a 1.0% upside.

In a report issued on June 1, Jefferies also reiterated a Buy rating on the stock with a $74 price target.

Cerner Corp’s market cap is currently $22.27B and has a P/E ratio of 34.93. The company has a book value ratio of 5.4153.

Based on the recent corporate insider activity of 35 insiders, corporate insider sentiment is negative on the stock. Last month, Neal Patterson, the Chairman & CEO of CERN sold 43,000 shares for a total of $2,766,190.

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Cerner Corp. designs, develops, markets, installs, hosts and supports health care information technology, health care devices, hardware and content solutions for health care organizations and consumers. It also provides a wide range of value-added services, including 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 for employer-based health plans. The company operates its business through two segments: Domestic and Global. The Domestic segment includes revenue contributions and expenditures associated with business activity in the United States. The Global segment includes revenue contributions and expenditures linked to business activity in Argentina, Aruba, Australia, Austria, Canada, Cayman Islands, Chile, China, Egypt, England, France, Germany, Guam, India, Ireland, Italy, Japan, Malaysia, Mexico, Morocco, Puerto Rico, Qatar, Saudi Arabia, Singapore, Spain, Sweden, Switzerland and the United Arab Emirates. Cerner was founded by Neal L. Patterson, Clifford W. Illig and Paul N. Gorup in 1979 and is headquartered in North Kansas City, MO.