HealthStream’s Q1 2025 Performance Impacted by Legacy Challenges and Budget Uncertainties, Hold Rating Maintained

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 impacting HealthStream’s recent performance. The company’s first-quarter results for 2025 fell short of expectations, with revenue affected by legacy customer attrition, lower license sales, and customer bankruptcies. Additionally, budget uncertainties led to delays in closing several medium-sized deals, which further contributed to the revenue shortfall.
Despite these challenges, HealthStream did secure a significant $14 million deal, and its new product offerings showed promising growth. However, ongoing issues with legacy products continue to cloud the company’s overall growth potential and valuation. The presence of these legacy products dilutes the company’s platform-as-a-service value proposition, making it difficult to confidently predict that similar quarterly shortfalls won’t occur in the near-to-medium term. Consequently, Richard Close maintains a Hold rating with a price target of $29.

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.