Cerner Collaborates With Salesforce, Focuses On AI Trends

In a bid to enhance population health, clinical and administration portfolio, Cerner Corporation (NASDAQ:CERN) recently announced a collaboration with Salesforce, the global leader in customer relationship management (CRM).

Lately, Cerner has been dominating the headlines owing to its efforts to digitize electronic health record systems. With the latest development, the company is planning to integrate the Salesforce Health Cloud and Marketing Cloud with its HealtheIntent to use artificial intelligence (AI) and reach ‘the next phase of health care delivery transformation’. Notably, HealtheIntent is Cerner’s flagship big-data platform.

Per management, leveraging on Cerner’s data, EHR and intelligent solutions, the addition of Health Cloud and Marketing Cloud will bring ‘game-changing solutions to consumers’. The new solution is expected to help patients participate in their physician’s decision-making process, supporting a personalized consumer experience.

Cerner Corporation Price

Cerner Corporation Price | Cerner Corporation Quote

Cerner Riding the Big Data & AI Trends

AI has been enhancing the healthcare space with EHR systems, practice workflows, clinical applications and more. The role of big data in medicine is very important in creating health profiles and better predictive models around individual patients to better diagnose and treat any disease. Per CISION, big data in healthcare industry has currently 7% market share in terms of revenues in Global Big-Data market and is estimated to become the third largest in 2020.

We believe that the new solution will not only be having the leverage of data and clinical content within Cerner HealtheIntent, it will also have the world’s leading Salesforce CRM platform. Undoubtedly, Cerner is going to have a competitive edge in MedTech through this collaboration.

The recent collaboration with Virginia-based Surescripts also deserves a mention in this regard. With this deal, Cerner will be able to integrate Surescripts’ Real-Time Prescription Benefit functionality into the “Cerner Millennium” EHR (read more: Cerner Partnering With Surescripts to Revamp EHR Platform).

Notably, stocks with strong exposure to AI have been providing handsome returns, higher than the broader market. Research firm Tractica expects AI market revenues to reach $59.8 billion by 2025. If such an optimistic forecast is to be relied on, it would be a quantum leap over the 2016 level of only $1.4 billion.

Price Performance

In the past year, Cerner's shares have gained 17.8% compared with the industry's rally of 18.3%. Regulatory headwinds and cutthroat competition have dented the performance.

Zacks Rank & Key Picks

Cerner has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are MEDNAX, Inc. (NYSE:MD) , ICU Medical, Inc. (NASDAQ:ICUI) and athenahealth, Inc. (NASDAQ:ATHN) . All the stocks have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

athenahealth has a projected long-term growth rate of 20.7%. The stock delivered a positive earnings surprise of 73.4% in the last quarter.

MEDNAX has an expected long-term growth rate of 10%. The stock delivered a positive earnings surprise of 3.6% in the last quarter.

ICU Medical has an expected long-term growth rate of 10%. The stock delivered a positive earnings surprise of 204.1% in the last quarter.

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