Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of health-care IT specialist Cerner
So what: Cerner shares have lagged a bit in recent months on concerns over slow bookings, but today's fourth-quarter beat -- adjusted EPS of $0.55 versus the consensus of $0.50 -- suggests that those fears are way overblown. In fact, bookings jumped to an all-time high of $899 million, so it's no surprise that the shares are once again flirting with their 52-week highs.
Now what: For the first quarter, management now sees adjusted EPS of $0.48-$0.50 on revenue of $565 million-$585 million, while analysts were expecting adjusted EPS of $0.49 on a top line of $565.2 million. "We expect to continue to see a strong market for health care IT solutions and services for years to come as the health care industry undergoes a transition from paper to digital records and shifts from volume-based payment programs to programs based on measurements of quality and outcomes," co-founder and CEO Neal Patterson said. With the stock still trading at a 40-plus P/E, however, I'd wait for a pullback before betting on those tailwinds.
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