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CPSI or CERN: Which Is the Better Value Stock Right Now?


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Investors interested in Medical Info Systems stocks are likely familiar with Computer Programs and Systems (CPSI) and Cerner (CERN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Computer Programs and Systems has a Zacks Rank of #2 (Buy), while Cerner has a Zacks Rank of #4 (Sell) right now. This means that CPSI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CPSI currently has a forward P/E ratio of 11.46, while CERN has a forward P/E of 22.33. We also note that CPSI has a PEG ratio of 1.11. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CERN currently has a PEG ratio of 1.62.

Another notable valuation metric for CPSI is its P/B ratio of 2.47. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CERN has a P/B of 3.58.

Based on these metrics and many more, CPSI holds a Value grade of A, while CERN has a Value grade of C.

CPSI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CPSI is likely the superior value option right now.


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Cerner Corporation (CERN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.




This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: CPSI , CERN



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