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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cerner Corporation (XNAS:CERN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CERN
Name:
CERNER CORPORATION (XNAS:CERN)
Sector:
271.67M
Industry:
Health Information Services
CEO:
Mr. Brent Shafer
Total Employees:
25,150
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -63.15% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CERNER CORPORATION(CERN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTH INFORMATION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
94.97
One Month Price Target:
$95.38
Six Month Price Target :
$97.4
Likely Price in One Year's Time:
Ticker:
$99.83
Likely Trading Range Today Under (Normal Volatility)
$94.76
Price Upper limit ($) :
$95.29
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$91.99
This week:
$88.31
This month :
$81.66
Other Primary facts
Market Cap:
27.92B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
294.10M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.93%
-6.22%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$108.78
$102.38
$81.16
$87.56
Medium risk (<10%) entry points
Buy Call
Sell Call
$100.29
Buy Put:
Sell Put:
$98.93
$89.63
$91.01
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CERN
Sharpe Ratio:
3.11%
Comparison:
CERN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 202.95% higher than the industry
& ratio is 36.51% higher than the market/S&P 500 average
Average Returns/Yield of
CERN
Daily returns:
0.06%
Weekly returns:
0.29%
Monthly returns:
1.14%
Yearly returns:
5.07%
Comparison of returns:
Average annual returns/yield (last 3 years) is 170.61% above industry average
Classification:
CERN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.96
Statistical test of Returns:
CERN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.55%
Weekly Volatility:
3.48%
Monthly Volatility:
6.95%
Yearly Volatility:
24.08%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
-
-
Value at Risk Analysis (VaR)
Daily VaR:
-3.13%
Weekly VaR:
-7.01%
Monthly VaR:
-14.02%
How Much Can the price of
CERN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-12%
Worst case (decline):
-48.57%
This translates to price declining to:
$83.82
This translates to price declining to:
$48.85
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CERN is -1.05% less risky an investment compared to the market/S&P 500 & is -15.23% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -54.30% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CERN
Beta in relation to market/S&P 500--0.76
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.572
Beta in relation to Nasdaq (XNAS):
0.383
Beta in relation to all global stocks::
0.511
Beta Comparison & Analysis
Beta of competitors/peers::
0.766
Beta is -0.51% lower than peers
Average Industry Beta:
0.87
Beta is -12.44% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.44%
Sustainable growth rate is -38.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.054
Alpha is -232.89% below industry average alpha yield
Alpha is 341% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CERN
Equity cost of capital:
0.084
Equity cost of capital is -8.14% below industry mean WACC
Unlevered (without debt) cost of capital:
6.28%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$19.74
Revenue growth rate per share of (3Y):
7.15
Annual revenue growth rate is -95.52% below industry average
EPS:
-
Expected Annual growth rate of EPS (3Y):
3.49%
Expected future EPS growth rate is -92.65% lower than the Health Information Services industry
Free cash flow (FCF) per share:
$76.49
-
-
Debt per share
$5.48
EBITDA per share
$4.93
Valuation Analysis Today of
CERN
P/E Ratio:
47.82
P/E Ratio of Competitors/Peers:
27.61
P/E ratio is 73.20% higher than main peers & is -86.91% lower than the industry
-
-
Share value as per dividend discount (DDM) model: $52.34
Present value of the expected future dividends only: $30.46
P/S (Price to Sales ratio):
4.81
Price to sales ratio is -36.55% below the industry mean
P/B (Price to book value ratio):
7.15
Price to free cash flow: 1.24
-
Net income growth rate (3Y):
-5.09%
Net income growth rate is -100.29% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 13.43%
Dividend yeild: 1.03%
Previous Dividend: $0.27
Previous adjusted dividend: $0.27
Previous Dividend: $0.98
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.24
Average dividend payment (long-term): $0.21
Average dividend increase/decrease (growth rate) % per period: 4.99%
Expected next dividend payment date: 18/07/2022
Expected next dividend record date: 27/06/2022
Expected next dividend declaration date: 13/06/2022
Previous dividend payment date: 19/04/2022
Previous dividend record date: 28/03/2022
Previous dividend declaration date: 14/03/2022
Dividend History:
2022-03-25--$0.27
2021-09-24--$0.22
2021-04-05--$0.22
2021-12-23--$0.27
2021-06-25--$0.22
2020-12-24--$0.22
Dividend growth rate is -492.52% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
41.23%
Net debt to equity ratio:
23.07%
Debt to assets ratio:
21.85%
Net debt to assets ratio:
12.23%
Debt-to-asset ratio is -36.04% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
37.44%
Annual debt growth is -10% lower than industry average debt growth rate
Debt repayment rate in last quarter: 12.25%
Analysis of Key Statistics
Correlation of price movement with the market:
0.53
Statistical significance of correlation:
CERN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.376
Stock price is 40.74% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.376
Correlation of price movement with Nasdaq (^IXIC):
0.046
Covariance of price movement with the market:
0.044
Kurtosis
10.256
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.045
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
CERN
Gross Profit Margin Ratio:
330%
Operating Profit Margin Ratio:
12.78%
Operating profit margin is -171.57% lower than the industry
Net Profit Margin Ratio:
330%
Effective Tax Rate:
19.49%
Effective tax rate is -1.58% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.08%
Return on equity (ROE) is -562.61% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.99%
Return on assets (ROA) is -560.46% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.79
Current ratio is -68.22% below industry average
Cash Conversion Cycle (days):
-44.1
Cash conversion cycle is -189.72% below industry average
The remaining useful life of property plant & equipment is: 6.7 years
Stock based compensation to net income ratio:
5.65%
In-depth Efficiency Analysis
Revenue generated per employee:
230.9K
Each employee generates -45% less revenue than industry average revenue per employee
EBITDA generated per employee:
57.7K
Each employee generates -241% less EBITDA than industry average revenue per employee
Profit generated per employee:
23.4K
Each employee generates -130% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.8K
Each employee generates -15% less free cash flow than industry average revenue per employee
Assets/Capital per employee
195.1K
Each employee generates -15% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 11.61%
Growth rate in R&D investment/expenditure is -188.71% lower than the industry
Competitors/Peer firms of
CERN
SEAGEN INC. (XNAS:SGEN)
Genmab A/S (XNAS:GMAB)
BEIGENE, LTD. (XNAS:BGNE)
HORIZON THERAPEUTICS PUBLIC LIMITED COMPANY (XNAS:HZNP)
BIOGEN INC. (XNAS:BIIB)
VIATRIS INC. (XNAS:VTRS)
ALNYLAM PHARMACEUTICALS, INC. (XNAS:ALNY)
HOLOGIC, INC. (XNAS:HOLX)
ROYALTY PHARMA PLC (XNAS:RPRX)
Current Analyst Ratings
Strong buy�25%
Buy�21%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.81B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.01B
4.79B
838.76M
517.58M
3.14B
2.63B
67.07M
4.05B
-
-
718.76M
1.45B
742.20M
589.47M
732.21M
142.73M
589.47M
Statement of Cash Flow
Date:
Period:
175.22M
Differed Income Tax :
- 36301.00K
Stock Based Compensation :
33.33M
Change in Working Capital :
- 3320.00K
Accounts Receivables:
-
Other Working Capital:
- 72800.00K
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
375.06M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 8439.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
709.53M
171.18M
880.71M
1.18B
27.70M
381.40M
2.47B
1.69B
1.13B
1.44B
456.40M
-
194.76M
4.91B
-
7.37B
359.56M
-
-
456.93M
562.38M
1.38B
1.61B
113.30M
2.09B
-
3.47B
3.81M
6.88B
- 119300.0K
-
March 31, 2022 at 6:00:00 AM
5.06B
3.91B
7.37B
627.58M
1.61B
901.8M
99.64M
- 103396.00K
- 12197.00K
- 225000.00K
-
-
- 79183.00K
62.85M
- 241334.00K
- 1847.00K
119.69M
709.53M
589.85M
375.06M
- 103396.00K
271.67M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CERN
2023
2024
2025
2026
2027
$74.87
$78.71
$82.74
$86.97
$91.42