HealthStream (HSTM) AI Stock Analysis

• Market Cap: $597.11M
• Dividend Yield: 0.52%
• Average Volume (3M): 215.55K
• Price to Earnings (P/E): 37.8
• Beta (1Y): 0.58
• Revenue Growth: 3.68%
• EPS Growth: 5.62%
• Country: US
• Employees: 1,083
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.09
• Shares Outstanding: 29,356,350
• 10 Day Avg. Volume: 287,357
• 30 Day Avg. Volume: 215,553
• PEG Ratio: -4.98
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 2.28
• P/FCF Ratio: 11.61
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 1.91
• Enterprise Value/Gross Profit: 2.95
• Enterprise Value/Ebitda: 8.97
• 1Y Price Target: $30.50
• Price Target Upside: 48.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.74
• Revenue Forecast (FY): $326.29M

• Rating: 69 Neutral
• Price Target: $22.00 ▲(7.00% Upside)
• Action: Downgraded Date: 03/14/26
• Date: Action: Downgraded 03/14/26

The score is anchored by strong financial quality (cash generation and a very conservative balance sheet) and constructive 2026 guidance with high recurring revenue visibility. These positives are tempered by a weak technical setup (below key moving averages with negative momentum) and a rich valuation (high P/E and low yield), which reduces near-term attractiveness despite solid fundamentals.

Positive Factors

High Recurring Revenue & Contract Visibility

A 96% subscription mix and $691M of remaining performance obligations provide multi-year revenue visibility and predictability. This recurring base supports steady cash flows, simplifies planning for product investment and M&A, and reduces revenue volatility versus transactional models over the next 2–6 months.

Conservative Balance Sheet

Very low leverage and no long-term debt give HealthStream durable financial flexibility to fund organic investments, targeted M&A, dividends, or buybacks without stressing solvency. A conservative balance sheet lowers bankruptcy risk and supports multi-quarter strategic execution and capital allocation choices.

Product Momentum & Platform Strategy

Strong growth across newer modules signals successful product-market fit and cross-sell potential. Combined with hStream platform and API/AI positioning, this product momentum supports customer retention, deeper wallet share, and a transition to higher-value platform revenues that are durable beyond short-term cycles.

Negative Factors

Gross Margin Pressure from Hosting/Licensing

Rising cloud hosting and third-party licensing costs compress gross margins, challenging the sustainability of mid-60% gross margins unless offset by pricing, scale efficiencies, or product mix shifts. Persistent cost inflation could erode operating leverage and long-term margin expansion.

Free Cash Flow Volatility and Cash Drawdowns

Sharp cash declines from acquisition spend and prior-year FCF variability indicate conversion and timing risk. While cash generation rebounded in 2025, continued M&A, elevated capex, or weaker-than-expected revenue could strain liquidity and reduce optionality for investment or shareholder returns over coming quarters.

Legacy Product Decline and Transition Risk

A substantial drop in legacy product revenue and a remaining legacy base (~10%) create execution risk: migrating customers and monetizing replacements takes time and investment. If transitions slow or churn rises, growth and margin targets may be pressured while the company continues to invest in modernization and platform scaling.

HealthStream Business Overview & Revenue Model

Company Description

HealthStream, Inc. provides workforce and provider solutions for healthcare organizations in the United States. It operates through two segments, Workforce Solutions and Provider Solutions. The company offers workforce solutions, including software-as-a-service (SaaS) based services and subscription-based solutions to meet the range of its clinical development, talent management, training, education, certification, scheduling, competency assessment, performance appraisal, and other needs, as well as implementation and account management services. It also provides applications for learning, performance appraisal, competency management, disclosure management, clinical assessment and development, simulation-based education, quality management, and industry training. In addition, the company offers VerityStream that delivers enterprise-class solutions to transform the healthcare provider experience for ambulatory surgery centers, urgent care facilities, clinics, medical groups, and other healthcare organizations; EchoCredentialing and MSOW platforms that manage medical staff credentialing, enrollment, and privileging processes for hospitals; and EchoOneApp, a provider enrollment platform for medical groups. Further, it provides CredentialMyDoc, a credentialing and enrollment SaaS solution for medical groups and surgery centers; CredentialStream, a SaaS-based provider credentialing, privileging, and enrollment solution; and NurseGrid Mobile for nurse managers. The company offers its solutions in healthcare industry companies that include private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through direct sales teams. HealthStream, Inc. was incorporated in 1990 and is headquartered in Nashville, Tennessee.

How the Company Makes Money

HealthStream primarily makes money by selling subscription-based access to its cloud software applications and content to healthcare organizations. A significant portion of revenue is generated from recurring SaaS fees tied to specific modules (e.g., learning management, competency assessment, credentialing/privileging, scheduling/workforce tools, and other workforce development applications) that customers license over multi-period contracts. The company also generates recurring revenue from subscription access to educational content, including clinical courseware and compliance training libraries that are delivered through its platform. In addition to subscriptions, HealthStream earns revenue from professional services and implementation activities associated with deploying and configuring its solutions (such as onboarding, integration, and customer support services), which are typically non-recurring or less recurring than SaaS fees. The company’s earnings are supported by its installed base of healthcare provider customers and the expansion of revenue per customer through cross-selling additional modules and content over time. Specific partnership details not publicly confirmed in a generally available source: null.

HealthStream Financial Statement Overview

Summary

Strong overall fundamentals supported by steady revenue growth, durable ~mid-60% gross margins, rising EBITDA margin, and consistently positive operating cash flow with a sharp FCF rebound in 2025. Balance sheet is a major strength with very low/leverage and no long-term debt. Offsets include modest net margin and a 2025 net income dip vs. 2024, plus some FCF volatility (notably 2024).

Income Statement

Revenue has grown steadily from 2021–2025 (mid-single-digit annually) with strong and stable gross margins (~64–66%). Profitability improved meaningfully versus 2021–2022, and EBITDA margins have trended higher (roughly ~17% to ~22%), signaling better operating efficiency. Offsetting this, net margin remains modest (~6% in 2025) and net income dipped in 2025 versus 2024 despite higher revenue, suggesting incremental cost pressure or below-the-line drag.

Balance Sheet

The balance sheet looks very conservative: debt is low and declining, and leverage remains minimal (debt-to-equity roughly ~4% in 2025, down from ~9% in 2020). Equity is sizable and fairly stable, supporting financial flexibility and lower solvency risk. The main limitation is that returns on equity have been moderate (mid-single digits in recent years where provided), reflecting a solid but not highly efficient profit engine.

Cash Flow

Cash generation is a core strength: operating cash flow has been consistently positive and generally rising, and free cash flow rebounded sharply in 2025 (up strongly versus 2024) to near operating cash flow levels. Free cash flow has typically tracked net income well (around ~0.9–1.0 in most years, weaker in 2024), indicating earnings are largely backed by cash. The key weakness is volatility—2024 saw a notable drop in free cash flow before the 2025 recovery, which raises questions about consistency of conversion year to year.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	304.06M	291.65M	279.06M	266.83M	256.71M
Gross Profit	196.85M	193.71M	184.04M	175.68M	165.68M
EBITDA	66.70M	62.53M	57.09M	50.39M	44.87M
Net Income	18.34M	20.01M	15.21M	12.09M	5.84M
Balance Sheet
Total Assets	520.37M	510.77M	499.94M	497.74M	486.75M
Cash, Cash Equivalents and Short-Term Investments	57.00M	97.22M	71.13M	53.91M	51.95M
Total Debt	14.68M	20.17M	20.25M	23.32M	29.11M
Total Liabilities	166.35M	151.41M	159.19M	163.68M	147.73M
Stockholders Equity	354.02M	359.36M	340.75M	334.06M	339.02M
Cash Flow
Free Cash Flow	59.63M	29.52M	61.77M	49.42M	38.97M
Operating Cash Flow	63.32M	57.66M	63.97M	51.19M	42.38M
Investing Cash Flow	-50.35M	-33.97M	-56.60M	-28.39M	-25.72M
Financing Cash Flow	-36.27M	-4.52M	-13.04M	-23.70M	-6.21M

HealthStream Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSTM, the sentiment is Negative. The current price of 20.56 is below the 20-day moving average (MA) of 21.25, below the 50-day MA of 21.22, and below the 200-day MA of 25.06, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 22.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HSTM.

HealthStream Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSTM	69 Neutral	$597.11M	37.76	5.87%	0.52%	3.68%	5.62%
OMDA	67 Neutral	$796.08M	-72.16	-7.10%	―	50.51%	50.92%
NUTX	65 Neutral	$620.11M	15.58	23.80%	―	236.03%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
DH	48 Neutral	$161.38M	-2.20	-47.69%	―	-5.30%	46.01%
EVH	46 Neutral	$288.03M	-0.85	-69.22%	―	-16.65%	-71.92%
HCAT	45 Neutral	$90.51M	-0.94	-30.28%	―	4.64%	-17.17%

HealthStream Corporate Events

HealthStream Expands Capital Flexibility, Launches New Share Buyback

On March 13, 2026, HealthStream, Inc., a healthcare technology platform company focused on clinical workforce solutions, amended its revolving credit agreement with Truist Bank to loosen restrictions on certain payments to shareholders. The amendment allows dividends and share repurchases that do not push the company’s pro forma leverage ratio above 1.50:1.00, as well as up to $50 million in additional restricted payments, provided no default exists, giving HealthStream greater flexibility in capital allocation.

Also on March 13, 2026, HealthStream announced that its board approved a new share repurchase program authorizing the buyback of up to $10 million of its outstanding common stock. The program, which may use open-market purchases, Rule 10b5-1 plans, or private transactions and runs until the earlier of September 12, 2026 or full utilization, signals a willingness to return capital to shareholders while potentially supporting the stock price and optimizing the company’s balance sheet.

Taken together, the credit agreement amendment and new buyback authorization indicate a more shareholder-friendly financial policy and suggest confidence in the company’s liquidity and leverage profile. These moves may enhance HealthStream’s flexibility to manage its capital structure and respond to market conditions, with implications for investors regarding potential future distributions and equity repurchases.

The most recent analyst rating on (HSTM) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on HealthStream stock, see the HSTM Stock Forecast page.

HealthStream Reports Record Q4 Revenue and Raises Dividend

HealthStream reported on February 23, 2026 that fourth-quarter 2025 revenue rose 7.4% year over year to a record $79.7 million, driven by higher subscription sales and supported by acquisitions of Virsys12 and MissionCare Collective, though GAAP operating income and net income declined due to a $3.8 million CEO-funded stock grant to more than 700 non-officer employees. For full-year 2025, revenue increased 4.3% to $304.1 million and adjusted profitability improved, while the board approved a share repurchase program and raised the quarterly dividend by 12.9% to $0.035 per share, underscoring continued capital returns to shareholders despite one-time compensation charges and higher operating costs linked to recent growth investments.

The most recent analyst rating on (HSTM) stock is a Hold with a $23.50 price target. To see the full list of analyst forecasts on HealthStream stock, see the HSTM Stock Forecast page.

HealthStream Acquires MissionCare Collective LLC

On December 15, 2025, HealthStream announced the acquisition of MissionCare Collective LLC, a healthcare workforce company known for its extensive caregiver network and flagship product, myCNAjobs.com. This acquisition marks the addition of HealthStream’s third Career Network, aimed at addressing the urgent need for non-medical caregivers, home health aides, and certified nurse assistants. The acquisition is expected to enhance HealthStream’s workforce ecosystem by offering comprehensive career tools and professional development opportunities, thereby creating synergies and adding value for stakeholders in the healthcare industry.

The most recent analyst rating on (HSTM) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on HealthStream stock, see the HSTM Stock Forecast page.