HealthStream (HSTM) AI Stock Analysis

• Market Cap: $629.85M
• Dividend Yield: 0.52%
• Average Volume (3M): 215.55K
• Price to Earnings (P/E): 34.9
• Beta (1Y): 0.60
• 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: 29,668,137
• 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: 0.98
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 3.12
• Enterprise Value/Ebitda: 9.48
• 1Y Price Target: $30.50
• Price Target Upside: 43.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.76
• Revenue Forecast (FY): $315.28M

• Rating: 71 Outperform
• Price Target: $23.50 ▲(10.69% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by strong financial quality (low debt and solid cash generation) and a positive forward outlook from management with high recurring revenue and improving adjusted profitability. These strengths are tempered by weak technicals (downtrend and negative MACD) and a relatively rich valuation (29.3 P/E with a ~0.6% yield).

Positive Factors

Recurring revenue & contract visibility

A 96% subscription mix and a $691M remaining performance obligation base provide durable revenue visibility and multi-year cash flow. With nearly 40% conversion in 12 months and two‑year visibility ~67%, the business can plan investments and predict recurring cash inflows, reducing revenue volatility.

Conservative balance sheet

Very low leverage and a conservative balance sheet preserve financial flexibility for strategic M&A, buybacks and dividend increases. Minimal solvency risk supports sustained investment in product development and platform scaling without material refinancing pressure over the medium term.

Product momentum and platform positioning

Strong organic growth across modern modules and expanding career networks signal durable product-market fit and cross-sell potential. Combined platform/AI emphasis and scale in NurseGrid/myCNAjobs create network effects and proprietary data advantages that support long-term customer retention and upsell.

Negative Factors

Gross margin pressure from hosting/licensing

Rising third‑party hosting and software license costs are compressing gross margins, a structural headwind as SaaS scale and platform investments grow. If these cost bases remain elevated, sustaining historical margin levels will require higher pricing, productivity gains, or margin-accretive product mix shifts.

Legacy product decline & transition risk

A 27% drop in legacy revenues and a remaining legacy bucket (~10% of revenue) imply ongoing migration risk. Converting legacy customers to modern modules can be costly and time-consuming, pressuring near-term growth and requiring sustained investment to avoid churn and permanent revenue loss.

Elevated capital intensity and cash deployment

Aggressive M&A and higher CapEx materially reduced cash balances and increase cash-flow variability. Continued strategic acquisitions and platform investments will likely keep free cash flow constrained and require careful capital allocation to avoid pressuring liquidity or limiting shareholder returns.

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 generates revenue primarily through subscription-based services and software licensing fees. The company offers its products on a recurring subscription model, allowing healthcare organizations to access its learning and performance management platforms for a monthly or annual fee. Key revenue streams include fees from its online learning courses, performance appraisal systems, and patient experience measurement tools. Additionally, HealthStream may engage in partnerships with healthcare institutions and organizations to provide customized training and consulting services, further contributing to its earnings. The company also benefits from the growing demand for healthcare workforce solutions driven by regulatory changes and the increasing need for skilled healthcare professionals.

HealthStream Financial Statement Overview

Summary

Strong overall fundamentals supported by a very conservative balance sheet (low and declining leverage) and consistently positive operating cash flow with a 2025 free-cash-flow rebound. Offsets include modest net margins, a 2025 net income dip versus 2024, and some year-to-year free cash flow volatility.

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: Neutral
• Last Price: 21.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HSTM, the sentiment is Neutral. The current price of 21.23 is above the 20-day moving average (MA) of 20.73, below the 50-day MA of 21.89, and below the 200-day MA of 25.59, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 45.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HSTM.

HealthStream Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NUTX	80 Outperform	$781.16M	5.73	63.86%	―	236.03%	―
HSTM	71 Outperform	$629.85M	34.89	5.87%	0.52%	3.68%	5.62%
OMDA	56 Neutral	$711.11M	-26.41	―	―	50.51%	50.92%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
HCAT	50 Neutral	$114.58M	-1.02	-31.33%	―	4.64%	-17.17%
DH	47 Neutral	$182.81M	-1.02	-47.69%	―	-5.30%	46.01%
EVH	46 Neutral	$362.82M	-0.63	-75.47%	―	-16.65%	-71.92%

HealthStream Corporate Events

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.

HealthStream CEO Donates Shares to Employees

On December 9, 2025, HealthStream‘s CEO, Robert A. Frist, Jr., contributed approximately $3.5 million of his personally owned shares to over 700 employees, excluding executives and vice presidents, as part of the company’s 2022 Omnibus Incentive Plan. This contribution, which includes an additional $275,000 to cover related company costs, will result in a compensation expense impacting the company’s financials in the fourth quarter of 2025, but it is seen as a positive move for employee engagement without affecting existing shareholders.

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.