Godaddy (GDDY) and Cerner (CERN) Critical Comparison

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Godaddy (NYSE:GDDY) and Cerner (NASDAQ:CERN) are both large-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations for Godaddy and Cerner, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Godaddy 1 4 12 0 2.65
Cerner 0 7 11 0 2.61

Godaddy presently has a consensus price target of $76.50, indicating a potential upside of 2.27%. Cerner has a consensus price target of $71.76, indicating a potential upside of 13.94%. Given Cerner’s higher possible upside, analysts clearly believe Cerner is more favorable than Godaddy.

Profitability

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

Net Margins Return on Equity Return on Assets
Godaddy 5.83% 8.78% 0.86%
Cerner 16.06% 15.26% 11.34%

Valuation & Earnings

This table compares Godaddy and Cerner’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Godaddy $2.23 billion 5.77 $136.40 million $0.42 178.10
Cerner $5.14 billion 4.03 $866.97 million $2.20 28.63

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

Volatility and Risk

Godaddy has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Cerner has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Institutional & Insider Ownership

93.6% of Godaddy shares are owned by institutional investors. Comparatively, 76.2% of Cerner shares are owned by institutional investors. 7.6% of Godaddy shares are owned by company insiders. Comparatively, 4.7% of Cerner shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

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

Godaddy Company Profile

GoDaddy Inc. designs and develops cloud-based technology products for small businesses, Web design professionals, and individuals in the United States and internationally. It provides domain name registration product that enables to engage customers at the initial stage of establishing a digital identity; hosting products, such as shared Website hosting, Website hosting on virtual private servers and virtual dedicated servers, managed hosting, and security. The company also offers presence products, including GoCentral, an online tool that enables customers to build Websites and online stores; and a range of marketing tools designed to help businesses acquire and engage customers, as well as search engine optimization that helps customers get their Websites found on search sites. In addition, the company offers business application products, including Microsoft Office 365, email accounts, email marketing, and telephony services. GoDaddy Inc. was incorporated in 2014 and is headquartered in Scottsdale, Arizona.

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.

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