We assign a fundamental rating of 4 out of 10 to CPSI. CPSI was compared to 34 industry peers in the Health Care Technology industry. There are concerns on the financial health of CPSI while its profitability can be described as average. 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.
In the past year CPSI had a positive cash flow from operations.
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 has a Return On Equity of -0.33%. This is amongst the best in the industry. CPSI outperforms 85.00% of its industry peers.
CPSI has a Return On Invested Capital of 0.46%. This is amongst the best in 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 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

CPSI's Profit Margin has declined in the last couple of years.
CPSI's Operating Margin of 0.61% is amongst the best of the industry. CPSI outperforms 82.50% of its industry peers.
CPSI's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 47.08%, CPSI perfoms like the industry average, 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

CPSI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
CPSI has a Altman-Z score (1.43) which is in line with its industry peers.
CPSI has a Debt/Equity ratio of 0.61. This is a neutral value indicating CPSI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.61, CPSI is not doing good in the industry: 67.50% of the companies in the same industry are doing better.

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

ROIC/WACC0.05

WACC9.37%

2.3 Liquidity

CPSI has a Current Ratio of 1.44. This is a normal value and indicates that CPSI is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CPSI (1.44) is comparable to the rest of the 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.
The Quick ratio of CPSI (1.42) 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.
CPSI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.71% yearly.
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

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.
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

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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.
Based on the Price/Earnings ratio, CPSI is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
CPSI is valuated cheaply when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 6.30, the valuation of CPSI can be described as very cheap.
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 25.72. CPSI is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	4.5
Fwd PE	6.3

4.2 Price Multiples

CPSI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CPSI is cheaper than 90.00% of the companies in the same industry.

		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.