CPSI gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 34 industry peers in the Health Care Technology industry. While CPSI is still in line with the averages on profitability rating, there are concerns on its financial health. CPSI has a valuation in line with the averages, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year CPSI was profitable.
CPSI had a positive operating cash flow in the past year.
CPSI had positive earnings in 4 of the past 5 years.
Of the past 5 years CPSI 4 years had a positive operating cash flow.

1.2 Ratios

CPSI has a better Return On Assets (-0.18%) than 85.00% of its industry peers.
CPSI's Return On Equity of -0.33% is amongst the best of the industry. CPSI outperforms 85.00% of its industry peers.
CPSI's Return On Invested Capital of 0.46% is amongst the best of the industry. CPSI outperforms 85.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CPSI is in line with the industry average of 6.63%.
The 3 year average ROIC (5.91%) for CPSI is well above the current ROIC(0.46%). The reason for the recent decline needs to be investigated.

		Industry Rank	Sector Rank
ROA	-0.18%
ROE	-0.33%
ROIC	0.46%

ROA(3y)4.18%

ROA(5y)4.71%

ROE(3y)7.24%

ROE(5y)8.61%

ROIC(3y)5.91%

ROIC(5y)6.38%

1.3 Margins

In the last couple of years the Profit Margin of CPSI has declined.
CPSI has a better Operating Margin (0.61%) than 82.50% of its industry peers.
CPSI's Operating Margin has declined in the last couple of years.
CPSI has a Gross Margin (47.08%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of CPSI has declined.

		Industry Rank	Sector Rank
OM	0.61%
PM (TTM)	N/A
GM	47.08%

OM growth 3Y-6.39%

OM growth 5Y-2.51%

PM growth 3Y-12.68%

PM growth 5YN/A

GM growth 3Y-3.42%

GM growth 5Y-2.33%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CPSI is destroying value.
There is no outstanding debt for CPSI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

CPSI has an Altman-Z score of 1.43. This is a bad value and indicates that CPSI is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of CPSI (1.43) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.61 indicates that CPSI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.61, CPSI is doing worse than 67.50% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.61
Debt/FCF	N/A
Altman-Z	1.43

ROIC/WACC0.05

WACC9.37%

2.3 Liquidity

A Current Ratio of 1.44 indicates that CPSI should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.44, CPSI is in line with its industry, outperforming 47.50% of the companies in the same industry.
A Quick Ratio of 1.42 indicates that CPSI should not have too much problems paying its short term obligations.
CPSI has a Quick ratio (1.42) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.44
Quick Ratio	1.42

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for CPSI have decreased strongly by -23.60% in the last year.
The Earnings Per Share has been growing slightly by 7.71% on average over the past years.
Looking at the last year, CPSI shows a small growth in Revenue. The Revenue has grown by 6.10% in the last year.
The Revenue has been growing slightly by 3.36% on average over the past years.

EPS 1Y (TTM)-23.6%

EPS 3Y0.52%

EPS 5Y7.71%

EPS Q2Q%-21.05%

Revenue 1Y (TTM)6.1%

Revenue growth 3Y5.95%

Revenue growth 5Y3.36%

Sales Q2Q%-0.14%

3.2 Future

Based on estimates for the next years, CPSI will show a very negative growth in Earnings Per Share. The EPS will decrease by -10.06% on average per year.
CPSI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.60% yearly.

EPS Next Y-26.07%

EPS Next 2Y-24.81%

EPS Next 3Y-10.06%

EPS Next 5YN/A

Revenue Next Year3.96%

Revenue Next 2Y2.41%

Revenue Next 3Y3.6%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

CPSI is valuated cheaply with a Price/Earnings ratio of 4.50.
Compared to the rest of the industry, the Price/Earnings ratio of CPSI indicates a rather cheap valuation: CPSI is cheaper than 100.00% of the companies listed in the same industry.
CPSI is valuated cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
CPSI is valuated cheaply with a Price/Forward Earnings ratio of 6.30.
Based on the Price/Forward Earnings ratio, CPSI is valued cheaper than 100.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.95. CPSI is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	4.5
Fwd PE	6.3

4.2 Price Multiples

90.00% of the companies in the same industry are more expensive than CPSI, based on the Enterprise Value to EBITDA ratio.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	10.06

4.3 Compensation for Growth

The decent profitability rating of CPSI may justify a higher PE ratio.
CPSI's earnings are expected to decrease with -10.06% in the coming years. This may justify a cheaper valuation.