Cerner (CERN) and Intuitive Surgical (ISRG) Financial Review

Cerner (NASDAQ: CERN) and Intuitive Surgical (NASDAQ:ISRG) are both large-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Cerner and Intuitive Surgical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerner 13.37% 18.03% 12.89%
Intuitive Surgical 30.16% 18.20% 15.90%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Cerner and Intuitive Surgical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerner 0 12 9 0 2.43
Intuitive Surgical 0 4 12 0 2.75

Cerner currently has a consensus price target of $69.31, suggesting a potential downside of 4.92%. Intuitive Surgical has a consensus price target of $348.84, suggesting a potential downside of 16.75%. Given Cerner’s higher possible upside, equities analysts plainly believe Cerner is more favorable than Intuitive Surgical.

Earnings and Valuation

This table compares Cerner and Intuitive Surgical’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cerner $4.80 billion 5.05 $636.48 million $2.01 36.27
Intuitive Surgical $2.70 billion 17.36 $735.90 million $7.74 54.14

Intuitive Surgical has lower revenue, but higher earnings than Cerner. Cerner is trading at a lower price-to-earnings ratio than Intuitive Surgical, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

81.8% of Cerner shares are held by institutional investors. Comparatively, 32.8% of Intuitive Surgical shares are held by institutional investors. 13.1% of Cerner shares are held by insiders. Comparatively, 2.2% of Intuitive Surgical shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Cerner has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Intuitive Surgical has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Summary

Intuitive Surgical beats Cerner on 9 of the 14 factors compared between the two stocks.

About Cerner

Cerner Corporation (Cerner) is a supplier of healthcare information technology (HCIT). The Company offers a range of intelligent solutions and services that support the clinical, financial and operational needs of organizations of all sizes. The Company’s segments include Domestic and Global. The Domestic segment includes revenue contributions and expenditures associated with business activity in the United States. The Global segment includes revenue contributions and expenditures linked to business activity in Aruba, Australia, Austria, the Bahamas, Belgium, Bermuda, Brazil, Canada, Cayman Islands, Chile, Denmark, Egypt, England, Finland, France, Germany, Guam, India, Ireland, Kuwait, Luxembourg, Malaysia, Mexico, the Netherlands, Norway, Portugal, Qatar, Romania, Saudi Arabia, Singapore, Slovakia, Spain, Sweden, Switzerland and the United Arab Emirates. The Company’s solutions are offered on the unified Cerner Millennium architecture and on the HealtheIntent cloud-based platform.

About Intuitive Surgical

Intuitive Surgical, Inc. (Intuitive) designs, manufactures and markets da Vinci Surgical Systems, and related instruments and accessories. The Company’s da Vinci Surgical System consists of a surgeon’s console, a patient-side cart and a vision system. The da Vinci Surgical System translates a surgeon’s hand movements, which are performed on instrument controls at a console, into corresponding micro-movements of instruments positioned inside the patient through small incisions or ports. The da Vinci Surgical System provides its operating surgeons with control, range of motion, tissue manipulation capability and three-dimensional (3-D), high-definition (HD) vision. Intuitive has four generations of da Vinci Surgical System: the da Vinci Xi Surgical System, the da Vinci Si Surgical System, the da Vinci S Surgical System and the standard da Vinci Surgical System. The Company’s instruments and accessories include EndoWrist Instruments and da Vinci Single-Site.

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