Why Cerner Shares Zoomed Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cerner , a health-care information technology company, advanced as much as 13% after inking a multi-year partnership with privately held Intermountain Healthcare.

So what: Under the terms of the deal, Cerner will be deploying its electronic-health records (EHR) and revenue cycle management software across Intermountain's network of 22 hospitals and 185 outpatient clinics. The move is expected to improve Cerner's upcoming quarterly bookings, and should only add fuel to the fire that Cerner is among the elite in terms of EHR software and data analytics.

Now what: Another day, another win for Cerner! There's little doubt that the upcoming health reform is going to work in Cerner's favor, with hospital operators needing to keep their costs under control now more than ever. Cerner's revenue cycle and data-analysis software are tools hospital operators should be turning to even more over the coming years. However, with the company valued at 31 times forward earnings, I can't help but feel that a majority of this optimism might already be baked into its share price.

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The article Why Cerner Shares Zoomed Higher originally appeared on Fool.com.

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