HealthStream’s Financial Struggles Lead to Hold Rating Amid Revenue and EPS Shortfalls

Barrington analyst Vincent Colicchio has maintained their neutral stance on HSTM stock, giving a Hold rating on May 14.

Vincent Colicchio has given his Hold rating due to a combination of factors impacting HealthStream’s financial performance. The company reported first-quarter revenue that was slightly below expectations, with a 2% miss compared to forecasts. This revenue shortfall was influenced by declines in legacy applications, perpetual license sales, and a client’s bankruptcy, which collectively hindered revenue growth.
Additionally, HealthStream’s earnings per share (EPS) fell short of both the analyst’s and the FactSet consensus forecasts. The EPS miss was attributed to lower-than-expected subscription and professional services revenue, as well as a shortfall in adjusted EBITDA margins. Despite these challenges, the company benefited from a lower tax rate. Given these financial results and the subsequent reduction in EPS forecasts for 2025 and 2026, Colicchio maintains a Market Perform rating, reflecting a balanced view on the stock’s valuation.

In another report released on May 14, Canaccord Genuity also maintained a Hold rating on the stock with a $29.00 price target.

Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of HSTM in relation to earlier this year.