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Cerner-Centrus Health to Collaborate, HealtheIntent in Focus

Zacks

In a bid to improve healthcare delivery and cost efficiency across the Kansas-City community, Cerner Corporation CERN will collaborate with Centrus Health.

Centrus Health will leverage on Cerner’s HealtheIntent population health management platform to coordinate and manage healthcare across Kansas City. Notably, Centrus Health is a clinically integrated, physician-led network, which comprises more than 1,600 physicians across Kansas City.

Lately, Cerner has been dominating the headlines owing to its efforts to digitize electronic health record systems. Cerner follows a strategy of acquiring and collaborating with complementary businesses that enable the company to expand solutions, device offerings and services as well as grow market share and client base.

In this regard, the company’s recent collaboration with Salesforce, the global leader in customer relationship management (CRM) deserves a mention (read more: Cerner Collaborates With Salesforce, Focuses on AI Trends).


Cerner Corporation Price

HealtheIntent in Focus

Cerner’s HealtheIntent is a big-data platform, which provides the company with significant exposure to the ongoing Artificial-Intelligence (AI) trends in the medical world.

HealthIntent can fetch data from any electronic health record systems and other data sources like pharmacy benefits managers or insurance claims. This population-health management platform also facilitates high-performing networks to empower health care stakeholders globally. It is completely cloud based.

At the end of the fourth quarter, management announced that developments like these are likely to increase the company’s operating costs. The company expects higher R&D investments as well.

Market Potential

Undoubtedly, Cerner has been banking on its Population Health platform a lot to gain solid traction in MedTech and the HCIT (Healthcare & Information Technology) markets. Per a research report by Markets And Markets, the population health management market is estimated to reach $42.54 billion by 2021, at a CAGR of 25.2% in the next five years (2016-2021). Other than Cerner, McKesson Corporation MCK is a major player in the space.

However, the market for HCIT solutions, devices and services is intensely competitive, fast evolving and subject to rapid technological change. Intense competition in the space may dent the company's pricing and margins.

Price Performance

In the past year, Cerner's shares have gained 17.8% compared with the industry's rally of 18.3%. Regulatory headwinds and cutthroat competition have dented the performance.

Zacks Rank & Key Picks

Cerner has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are MEDNAX, Inc. MD and athenahealth, Inc. ATHN. The stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has a projected long-term growth rate of 20.7%. The stock delivered a positive earnings surprise of 73.4% in the last quarter.

MEDNAX has an expected long-term growth rate of 10%. The stock delivered a positive earnings surprise of 3.6% in the last quarter.

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