Canaccord Genuity analyst Richard Close maintained a Hold rating on HealthStream (HSTM – Research Report) yesterday and set a price target of $29.00.
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Richard Close has given his Hold rating due to a combination of factors including HealthStream’s recent financial performance and future outlook. The company reported a revenue increase of 5.2% in the fourth quarter, marking its fastest growth rate since the first quarter of 2024. However, the adjusted EBITDA slightly missed consensus expectations, which is unusual for HealthStream as it typically exceeds these estimates.
Looking ahead, HealthStream’s 2025 revenue guidance suggests moderate growth, aligning closely with market estimates. While the company has made recent acquisitions, their impact on revenue is expected to be minimal. Additionally, the projected increase in capital expenditures raises questions about future margin improvements, particularly with the potential use of generative AI in research and development. These elements contribute to a cautious outlook, justifying the Hold rating.
Close covers the Healthcare sector, focusing on stocks such as Evolent Health, Phreesia, and HealthStream. According to TipRanks, Close has an average return of 13.0% and a 52.59% success rate on recommended stocks.