Reviewing Thoratec (THOR) & Cerner (CERN)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Thoratec 10.29% 8.02% 6.71%
Cerner 16.86% 16.82% 12.20%

Institutional and Insider Ownership

78.5% of Cerner shares are owned by institutional investors. 13.1% of Cerner shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Thoratec and Cerner’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Thoratec N/A N/A N/A $0.70 N/A
Cerner $5.14 billion 3.75 $866.97 million $2.57 22.57

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

Analyst Ratings

This is a summary of recent recommendations for Thoratec and Cerner, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Thoratec 0 0 0 0 N/A
Cerner 0 10 9 0 2.47

Cerner has a consensus price target of $67.20, indicating a potential upside of 15.87%.

Summary

Cerner beats Thoratec on 8 of the 8 factors compared between the two stocks.

About Thoratec

Thoratec Corporation develops, manufactures and markets medical devices used for mechanical circulatory support for the treatment of heart failure patients. The Company’s products include ventricular assist devices (VADs), such as HeartMate II Left Ventricular Assist System (HeartMate II), HeartMate III Left Ventricular Assist System, Thoratec Paracorporeal Ventricular Assist Device (PVAD) and Thoratec Implantable Ventricular Assist Device (IVAD). For acute circulatory support, the Company’s product lines are CentriMag Acute Circulatory System (CentriMag) and for pediatric patients PediMag/PediVAS Acute Circulatory System (PediMag/PediVAS). HeartMate III, a centrifugal-flow, chronic, left ventricular assist system.

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.

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