Cerner Corp: Zacks’ Bear of the Day Play

Cerner Corp (CERNFree Report) designs, develops, markets, installs and supports information technology and content solutions for healthcare organizations and consumers. The company offers Cerner Millennium architecture, which includes clinical, financial, and management information systems that allow providers to access an individual’s electronic health record at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers.The stock is the Bear of the Day after it recently became a Zacks Rank #5 (Strong Sell) because of a poor earnings and multiple downgrades.

Cerner has a market cap of $16.5 billion with a forward PE of 23. The company is based in North Kansas City, Missouri and was founded in 1979. They employ over 22,000.

The stock sports a Zacks Style Scores of “B” in Growth, but “C” in Value and Momentum. The company sees expected 3-5 year EPS growth around 15%, but pays no dividend. The stock has fallen upon rough times after last quarters EPS report.

Q3 Earnings

The company reported Q3 earnings in early November, with EPS missing expectations by a penny. Revenue came up short as well, coming in at $1.19 billion versus the $1.25 billion expected. Guidance was the issue, the company now sees Q4 at $0.60-0.62 versus the $0.65 expected. They also saw revenue coming in light and guided down fiscal year 2017.

Estimates have been revised lower to reflect the guidance. Over the last 60 days estimates have fallen 4.7%, from $2.51 to $2.39. As the estimates have come down, so has the stock.

Stock Reaction

The stock was trading over $58 before earnings, but fell over 8% to $52 the day of earning. Investors were not happy with the results and have continued to sell the stock under the $50 level. The stock has now broken 2014 levels and 2013 around $35 might be in sight for the bears.

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More Stocks to Sell. Now.

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