| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 13.20 | -78 |
| Graham Formula | 17.60 | -71 |
Cerner Corporation, a subsidiary of Oracle Corporation since June 2022, is a leading provider of health care information technology (HCIT) solutions and tech-enabled services. Headquartered in North Kansas City, Missouri, Cerner specializes in electronic health records (EHR), population health management, and care coordination through its flagship platforms like Cerner Millennium and HealtheIntent. Serving a diverse clientele—including hospitals, physician groups, managed care organizations, and government entities—Cerner enhances clinical, financial, and operational workflows with its integrated HCIT solutions. The company’s offerings span EHR systems, cloud-based data aggregation, revenue cycle management, and real-world evidence analytics, positioning it as a key player in the digital transformation of healthcare. With a global footprint and a strong emphasis on interoperability, Cerner plays a pivotal role in improving patient outcomes and healthcare efficiency. Its acquisition by Oracle underscores its strategic importance in the evolving HCIT landscape, combining Cerner’s domain expertise with Oracle’s cloud infrastructure and AI capabilities.
Cerner Corporation presents a compelling investment case due to its strong market position in healthcare IT, recurring revenue streams from tech-enabled services, and synergies post-Oracle acquisition. The company’s robust operating cash flow ($1.77B in FY2021) and solid net income ($555.6M) reflect financial stability. However, its high total debt ($1.84B) and capital expenditures ($627M) may weigh on margins. The lack of dividend growth (static at $0.90/share) and dependence on large-scale EHR implementations pose risks. Oracle’s backing could accelerate cloud adoption and AI integration, but competition from Epic Systems and regulatory pressures in healthcare IT remain challenges. The stock’s beta (0.76) suggests lower volatility than the market, appealing to conservative investors.
Cerner holds a strong competitive position in the HCIT market, particularly in EHR and population health management, competing primarily with Epic Systems and smaller niche players. Its Cerner Millennium platform is widely adopted in large hospital systems, though Epic dominates the academic medical center segment. Cerner’s HealtheIntent differentiates it in value-based care analytics, but interoperability limitations persist. The Oracle acquisition enhances its cloud capabilities, a weakness relative to cloud-native rivals like Athenahealth. Cerner’s revenue cycle management tools compete with R1 RCM, while its international footprint (unlike Epic’s US-centric model) provides diversification. However, its on-premise software legacy requires costly migrations to Oracle Cloud. Competitive advantages include deep provider relationships, regulatory compliance expertise, and Oracle’s R&D resources. Weaknesses include slower innovation cycles than startups and pricing pressure from Medicaid-focused competitors. Post-acquisition, Cerner must leverage Oracle’s AI/ML tools to stay ahead in predictive analytics.