HealthStream’s Financial Struggles Prompt Hold Rating Amid Revenue and EBITDA Declines

Canaccord Genuity analyst Richard Close has maintained their neutral stance on HSTM stock, giving a Hold rating on April 30.

Richard Close has given his Hold rating due to a combination of factors related to HealthStream’s recent financial performance and market conditions. The company’s first-quarter results for 2025 fell short of both his and the consensus expectations, with revenue growth slowing to 1%, a significant drop from the 5.2% growth seen in the previous quarter. This decline was attributed to several issues, including legacy attrition, reduced license sales, and customer bankruptcies, which collectively impacted revenue by several million dollars.
Additionally, HealthStream’s adjusted EBITDA also declined year-over-year, missing both Close’s and the consensus estimates. The shortfall in revenue, particularly from high-margin legacy software and license clients, likely contributed to this EBITDA miss. Given these challenges, Close remains cautious and is awaiting further insights from the company’s management, particularly regarding the transition of customers to HealthStream’s SaaS platform and the broader hospital purchasing environment. As a result, he maintains a Hold position, opting to stay on the sidelines until more clarity is provided.

Close covers the Healthcare sector, focusing on stocks such as Teladoc, Clover Health Investments, and HealthStream. According to TipRanks, Close has an average return of 10.7% and a 49.69% success rate on recommended stocks.