Cerner Corporation (NASDAQ: CERN) and ABIOMED (NASDAQ:ABMD) are both mid-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Cerner Corporation and ABIOMED, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerner Corporation 0 12 9 0 2.43
ABIOMED 0 2 6 0 2.75

Cerner Corporation presently has a consensus target price of $69.18, indicating a potential upside of 5.92%. ABIOMED has a consensus target price of $180.43, indicating a potential downside of 7.57%. Given Cerner Corporation’s higher possible upside, research analysts clearly believe Cerner Corporation is more favorable than ABIOMED.

Earnings and Valuation

This table compares Cerner Corporation and ABIOMED’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cerner Corporation $4.80 billion 4.53 $636.48 million $2.01 32.49
ABIOMED $445.30 million 19.39 $52.11 million $2.03 96.16

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cerner Corporation 13.37% 18.03% 12.89%
ABIOMED 18.27% 13.89% 11.83%

Risk and Volatility

Cerner Corporation has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, ABIOMED has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Insider & Institutional Ownership

78.6% of Cerner Corporation shares are owned by institutional investors. Comparatively, 90.6% of ABIOMED shares are owned by institutional investors. 13.2% of Cerner Corporation shares are owned by company insiders. Comparatively, 7.0% of ABIOMED shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Cerner Corporation beats ABIOMED on 8 of the 14 factors compared between the two stocks.

About Cerner Corporation

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 ABIOMED

ABIOMED, Inc. is a provider of temporary percutaneous mechanical circulatory support devices. The Company offers care to heart failure patients. The Company operates in the segment of the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company develops, manufactures and markets products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily performing the pumping function of the heart. The Company’s product portfolio includes the Impella 2.5, Impella CP, Impella RP, Impella LD, Impella 5.0 and AB5000. The Company’s products are used in the cardiac catheterization lab (cath lab), by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons.

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