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. CPSI has a medium profitability rating, but doesn't score so well on its financial health evaluation. CPSI has a valuation in line with the averages, but on the other hand it scores bad on growth.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CPSI had positive earnings in the past year.
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 Return On Assets of -0.18%. This is amongst the best in the industry. CPSI outperforms 85.00% of its industry peers.
Looking at the Return On Equity, with a value of -0.33%, CPSI belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
CPSI's Return On Invested Capital of 0.46% is amongst the best of the industry. CPSI outperforms 85.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CPSI is in line with the industry average of 6.63%.
The last Return On Invested Capital (0.46%) for CPSI is well below the 3 year average (5.91%), which needs to be investigated, but indicates that CPSI had better years and this may not be a problem.

		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.
Looking at the Operating Margin, with a value of 0.61%, CPSI belongs to the top of the industry, outperforming 82.50% of the companies in the same industry.
In the last couple of years the Operating Margin of CPSI has declined.
Looking at the Gross Margin, with a value of 47.08%, CPSI is in line with its industry, outperforming 42.50% of the companies in the same 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.
CPSI has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

Based on the Altman-Z score of 1.43, we must say that CPSI is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.43, CPSI is in line with its industry, outperforming 60.00% of the companies in the same industry.
CPSI has a Debt/Equity ratio of 0.61. This is a neutral value indicating CPSI is somewhat dependend on debt financing.
CPSI has a Debt to Equity ratio of 0.61. This is in the lower half of the industry: CPSI underperforms 67.50% of its industry peers.

		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.
With a Current ratio value of 1.44, CPSI perfoms like the industry average, outperforming 47.50% of the companies in the same industry.
CPSI has a Quick Ratio of 1.42. This is a normal value and indicates that CPSI is financially healthy and should not expect problems in meeting its short term obligations.
CPSI has a Quick ratio (1.42) which is in line with its industry peers.

		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.
CPSI shows a small growth in Revenue. In the last year, the Revenue has grown by 6.10%.
Measured over the past years, CPSI shows a small growth in Revenue. The Revenue has been growing by 3.36% on average per year.

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

The Earnings Per Share is expected to decrease by -10.06% on average over the next years. This is quite bad
Based on estimates for the next years, CPSI will show a small growth in Revenue. The Revenue will grow by 3.60% on average per year.

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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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 27.21, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 6.30, which indicates a rather cheap valuation of CPSI.
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 25.98. 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.