Contrasting Cerner (CERN) & Mattersight (MATR)

Cerner (NASDAQ: CERN) and Mattersight (NASDAQ:MATR) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Cerner 16.86% 16.82% 12.20%
Mattersight -35.09% N/A -31.41%

Volatility and Risk

Cerner has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Mattersight has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Insider and Institutional Ownership

78.8% of Cerner shares are held by institutional investors. Comparatively, 43.2% of Mattersight shares are held by institutional investors. 4.7% of Cerner shares are held by insiders. Comparatively, 28.3% of Mattersight 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.

Valuation & Earnings

This table compares Cerner and Mattersight’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cerner $5.14 billion 3.78 $866.97 million $2.20 26.62
Mattersight $46.51 million 1.61 -$16.32 million ($0.49) -4.59

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Cerner and Mattersight, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerner 0 10 11 0 2.52
Mattersight 0 1 0 0 2.00

Cerner presently has a consensus price target of $67.24, indicating a potential upside of 14.81%. Mattersight has a consensus price target of $2.75, indicating a potential upside of 22.22%. Given Mattersight’s higher possible upside, analysts plainly believe Mattersight is more favorable than Cerner.

Summary

Cerner beats Mattersight on 11 of the 13 factors compared between the two stocks.

Cerner Company Profile

Cerner Corporation provides health care information technology solutions and services in the United States and internationally. The company offers Cerner Millennium architecture, a person-centric computing framework, which includes clinical, financial, and management information systems that allow providers to access an individual's electronic health record (EHR) at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers. It also provides HealtheIntent platform, a cloud-based platform that enables organizations to aggregate, transform, and reconcile data across the continuum of care, as well as EHR agnostic platform, CareAware, that facilitates connectivity of health care devices to EHRs. In addition, the company offers a portfolio of clinical and financial health care information technology solutions, as well as departmental, connectivity, population health, and care coordination solutions; and various complementary services, including support, hosting, managed, implementation, and strategic consulting services. Further, it provides various services, such as implementation and training, remote hosting, operational management, revenue cycle, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs, and third party administrator services for employer-based health plans; and complementary hardware and devices for third parties. It serves integrated delivery networks, physician groups and networks, managed care organizations, hospitals, medical centers, reference laboratories, home health agencies, blood banks, imaging centers, pharmacies, pharmaceutical manufacturers, employers, governments, and public health organizations. Cerner Corporation was founded in 1979 and is headquartered in North Kansas City, Missouri.

Mattersight Company Profile

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services that analyzes and predicts customer behavior based on the language exchanged between agents and customers during brand interactions to enhance customer satisfaction and retention, employee engagement, and operating efficiency. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

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