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Healthstream (HSTM)
NASDAQ:HSTM
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HealthStream
(NASDAQ:HSTM)
64Neutral
Positive Factors
Contract Signing
HealthStream signed one of the largest deals in its history, a $14 million 5-year bundled deal with a large health system.
Revenue Growth
The company's total revenue increased 5% year-over-year, driven by strong growth in subscription and professional services revenue.
Negative Factors
Earnings and Revenue Shortfall
The company reported Q1/25 revenue of $73.5 million, which was 2% less than the forecast and the FactSet consensus forecast.
EPS and EBITDA Miss
HealthStream reported Q1/25 non-GAAP EPS of $0.14, which was less than the forecast of $0.16 and less than the FactSet consensus forecast of $0.17.
Technology Issues
There were technology scaling issues with the CredentialStream product that impacted service quality and delayed implementations.
HealthStream (HSTM) vs. S&P 500 (SPY)
Market Cap
$889.20M
Dividend Yield0.4%
Average Volume (3M)206.39K
Price to Earnings (P/E)45.6
Beta (1Y)0.53
Revenue Growth3.36%
EPS Growth7.51%
CountryUS
Employees1,083
SectorHealthcare
Sector Strength43
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding30,525,267
10 Day Avg. Volume306,278
30 Day Avg. Volume206,394
Financial Highlights & Ratios
PEG Ratio-9.42
Price to Book (P/B)2.26
Price to Sales (P/S)0.00
P/FCF Ratio19.37
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.00Price Target Upside1.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
HealthStream Business Overview & Revenue Model
Company DescriptionHealthStream, Inc. (HSTM) is a leading provider of workforce development, training, and education solutions for the healthcare industry. The company focuses on delivering innovative technologies and services designed to improve the competency and quality of healthcare professionals. HealthStream's core offerings include learning management systems, credentialing solutions, and compliance training, all aimed at enhancing outcomes and efficiencies within healthcare organizations.
How the Company Makes MoneyHealthStream generates revenue primarily through subscription-based services and licensing fees for its software platforms. The company's main revenue streams include sales of its learning management systems, which hospitals and healthcare facilities subscribe to for employee training and development. Additionally, HealthStream offers credentialing and privileging solutions that facilitate the management of healthcare workforce credentials, contributing to its revenue. The company also partners with content providers and healthcare associations to offer a diverse range of educational materials, further enhancing its revenue through content licensing and distribution agreements. These partnerships and the recurring nature of subscription services play a significant role in HealthStream's earnings.
HealthStream Financial Statement Overview
Summary
HealthStream's financial statements collectively portray a company with strong growth potential and financial stability. The robust income statement reflects consistent revenue and profit growth, while a solid balance sheet underscores financial health with low leverage. Cash flows are strong, though some volatility in non-operational cash activities requires monitoring. Overall, HealthStream is well-positioned within its industry, with a promising outlook contingent on maintaining operational efficiencies and financial prudence.Income Statement
HealthStream's income statement demonstrates solid growth and profitability. The TTM revenue shows a consistent upward trend, with a noticeable revenue growth from 2022 to 2024. The gross profit margin remains healthy, indicating efficient cost management. Net profit and EBITDA margins have improved over time, reflecting enhanced operational efficiency. However, the margin expansion slowed slightly in the most recent period, suggesting a need for ongoing cost control.78
Positive
Balance Sheet
The balance sheet is robust, characterized by a strong equity base and low leverage. The company's debt-to-equity ratio is low, which limits financial risk and enhances financial stability. The equity ratio is high, indicating a solid financial foundation. Return on equity is improving, signaling effective use of shareholders' funds. The balance sheet's strength is a key competitive advantage, though attention should be paid to maintaining this low leverage as the company grows.82
Very Positive
Cash Flow
Cash flow statements reveal a positive trajectory in free cash flow growth, supported by strong operating cash flows. The operating cash flow to net income ratio is favorable, suggesting effective cash conversion. Free cash flow has expanded over the periods, underscoring the company's capacity to generate cash post capital expenditures. However, fluctuations in investing and financing cash flows suggest potential volatility in non-operational activities.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 292.37M | 291.65M | 279.06M | 266.83M | 256.71M | 244.83M | Gross Profit |
| 183.19M | 193.71M | 184.04M | 175.68M | 165.68M | 155.49M | EBIT |
| 19.98M | 21.29M | 16.02M | 12.45M | 8.05M | 15.82M | EBITDA |
| 62.51M | 62.53M | 59.59M | 50.39M | 44.87M | 46.01M | Net Income Common Stockholders |
| 19.11M | 20.01M | 15.21M | 12.09M | 5.84M | 14.09M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 113.32M | 97.22M | 71.13M | 53.91M | 51.95M | 46.49M | Total Assets |
| 524.04M | 510.77M | 499.94M | 497.74M | 486.75M | 500.31M | Total Debt |
| 16.64M | 17.37M | 20.25M | 23.32M | 26.18M | 28.48M | Net Debt |
| -60.65M | -42.10M | -20.09M | -22.70M | -20.73M | -8.09M | Total Liabilities |
| 161.23M | 151.41M | 159.19M | 163.68M | 147.73M | 166.25M | Stockholders Equity |
| 362.81M | 359.36M | 340.75M | 334.06M | 339.02M | 334.06M |
| Cash Flow | Free Cash Flow | ||||
| 42.36M | 29.52M | 35.96M | 26.09M | 17.04M | 17.07M | Operating Cash Flow |
| 63.80M | 57.66M | 63.97M | 51.19M | 42.38M | 35.87M | Investing Cash Flow |
| -34.10M | -33.97M | -56.60M | -28.39M | -25.72M | -110.41M | Financing Cash Flow |
| -4.82M | -4.52M | -13.04M | -23.70M | -6.21M | -20.49M |
HealthStream Technical Analysis
Negative
28.65
Price Trends
31.29
Negative
31.92
Negative
30.83
Negative
Market Momentum
-1.30
Positive
40.33
Neutral
35.47
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 28.65 is below the 20-day moving average (MA) of 30.55, below the 50-day MA of 31.29, and below the 200-day MA of 30.83, indicating a bearish trend. The MACD of -1.30 indicates Positive momentum. The RSI at 40.33 is Neutral, neither overbought nor oversold. The STOCH value of 35.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HSTM.
HealthStream Risk Analysis
HealthStream disclosed 37 risk factors in its most recent earnings report. HealthStream reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
HealthStream Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $889.20M | 45.59 | 5.40% | 0.40% | 3.36% | 7.51% | |
63 Neutral | $271.44M | ― | -19.80% | ― | 4.88% | 37.87% | |
59 Neutral | $1.51B | ― | -22.67% | ― | 17.83% | 59.64% | |
54 Neutral | $1.01B | ― | -10.99% | ― | 10.24% | 2.63% | |
52 Neutral | $5.19B | 3.04 | -44.20% | 2.82% | 16.59% | -0.39% | |
48 Neutral | $1.28B | ― | -54.49% | ― | -2.54% | -322.03% |
* Healthcare Sector Average
Performance Comparison
HSTM
HealthStream
28.65
1.34
4.91%
EVH
Evolent Health
8.77
-14.21
-61.84%
TDOC
Teladoc
7.34
-4.49
-37.95%
PHR
Phreesia
25.49
1.87
7.92%
HCAT
Health Catalyst
3.94
-2.83
-41.80%
HealthStream Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: -13.70%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements such as strong growth in core products, a major contract win, and a robust financial position. However, these positives were tempered by revised downward guidance, operational delays, and macroeconomic challenges affecting certain product lines and revenue recognition. The sentiment is cautious as the company navigates these challenges while maintaining a strong balance sheet and cash flow.Q1-2025 Updates
Positive Updates
Strong Core Business Growth
CredentialStream experienced a 25% growth, ShiftWizard grew by 19%, and Competency suite by 12%. The core business grew over 6% after excluding the impact of legacy products and customer bankruptcy.
Record Contract Win
HealthStream secured a $14 million deal, one of the largest in its history, with a major health system, including new Competency suite products.
Strong Financial Position
The company reported cash and investment balances of $113.3 million, with no interest-bearing debt, highlighting a strong balance sheet.
Improved Cash Flows
Cash flows from operations were $27.1 million, marking a 29.3% increase from the previous year. Free cash flows improved by 38.3% to $18.2 million.
High Remaining Performance Obligations
The remaining performance obligations were $613 million as of the end of the first quarter, compared to $514 million in the prior year.
Successful User Group Conference
The Annual Credentialing User Group Conference, Thrive25, was well-received, where customers shared success stories using CredentialStream.
Negative Updates
Revised Downward Guidance
The company revised its consolidated revenue expectations downwards to between $297.5 million and $303.5 million, and net income guidance to between $18.6 million and $21 million.
Operational and Implementation Delays
Delays in medium-sized deals and implementation backlogs in CredentialStream have affected in-year revenue recognition, causing revised guidance.
Impact of Legacy Product Attrition
Revenue from legacy Credentialing and Scheduling products declined by $1.7 million compared to last year, impacting the overall growth rate.
Macroeconomic Headwinds
Challenges such as funding cuts to Federally Qualified Health Centers and Academic Medical Institutions are impacting renewal decisions and purchasing patterns.
Technical Challenges with CredentialStream
Temporary scaling issues with CredentialStream affected service quality and implementation timelines, which are being addressed.
Decline in Net Income and EPS
Net income was down 17.1% to $4.3 million, and EPS decreased to $0.14 per share from $0.17 per share.
Company Guidance
During HealthStream's first-quarter 2025 earnings call, the company revised its in-year guidance slightly downward due to macroeconomic challenges and temporary operational issues. Despite these hurdles, HealthStream remains optimistic about its growth trajectory, forecasting year-over-year revenue and EBITDA growth. The company highlighted a strong sales pipeline and significant wins, including a $14 million deal, one of the largest in its history. However, some medium-sized deals, expected to bring in $1 million to $4 million each, were delayed from Q1 to Q2. HealthStream reported Q1 revenues of $73.5 million, a 1% increase from the previous year, and adjusted EBITDA of $16.2 million, down 5%. The company maintains a solid balance sheet with $113.3 million in cash and investments and no interest-bearing debt. Despite challenges, HealthStream continues to see growth in its core applications, with CredentialStream growing 25%, ShiftWizard 19%, and its Competency suite 12%. The revised annual revenue guidance is set between $297.5 million and $303.5 million, with adjusted EBITDA expected to range from $68.5 million to $72.5 million.HealthStream Corporate Events
Stock Buyback
HealthStream Announces $25 Million Share Buyback Program
Neutral
May 8, 2025
On May 8, 2025, HealthStream announced that its Board of Directors has approved a new share repurchase program, allowing the company to buy back up to $25 million of its outstanding common stock. This initiative, which will run until May 31, 2026, or until the maximum amount is spent, is subject to market conditions and regulatory requirements, and can be suspended or discontinued at any time.
Spark’s Take on HSTM Stock
According to Spark, TipRanks’ AI Analyst, HSTM is a Neutral.
HealthStream’s overall stock score reflects a company with solid financial performance and stability, albeit facing technical challenges and valuation concerns. While recent earnings and corporate developments indicate potential for future growth, the high P/E ratio and bearish technical indicators suggest cautious optimism. The company’s ability to navigate macroeconomic headwinds and execute operational efficiencies will be critical in improving its stock performance.
To see Spark’s full report on HSTM stock, click here.
DividendsBusiness Operations and StrategyFinancial Disclosures
HealthStream Reports Q1 2025 Financial Results
Neutral
May 5, 2025
On May 5, 2025, HealthStream announced its financial results for the first quarter of 2025, revealing a slight increase in revenue to $73.5 million, but a decline in operating income and net income compared to the same period in 2024. The company attributed these results to investments in platform and SaaS applications, as well as changes in revenue mix. The Board declared a quarterly cash dividend of $0.031 per share. Additionally, HealthStream updated its financial guidance for 2025, reflecting macroeconomic challenges and technology scaling issues, while maintaining a strong sales pipeline.
Spark’s Take on HSTM Stock
According to Spark, TipRanks’ AI Analyst, HSTM is a Outperform.
HealthStream demonstrates a solid financial performance with improved profitability and a strong balance sheet. The earnings call reflects robust growth and strategic focus on the HStream platform, while corporate events add positive sentiment. However, the high P/E ratio suggests a premium valuation, and technical analysis indicates neutral momentum with potential overbought conditions. Overall, HealthStream is positioned for continued growth, but valuation and legacy product challenges remain.
To see Spark’s full report on HSTM stock, click here.
Business Operations and Strategy
HealthStream Subleases Office Space for Hybrid Work Strategy
Neutral
Mar 14, 2025
On March 13, 2025, HealthStream announced an agreement to sublease part of its Nashville office space, aligning with its hybrid work strategy. This move is aimed at optimizing workforce performance and supporting long-term growth initiatives without affecting the company’s financial guidance for 2025.
Executive/Board ChangesBusiness Operations and Strategy
HealthStream Appoints Charles E. Beard, Jr. to Board
Positive
Mar 11, 2025
On March 7, 2025, HealthStream, Inc. appointed Charles E. Beard, Jr. to its Board of Directors, where he will also serve on the Audit Committee. Mr. Beard brings over 30 years of executive experience, including roles at Guidehouse and PwC, and his addition is expected to enhance HealthStream’s strategic discussions and support its mission of improving clinical outcomes by investing in healthcare professionals.
DividendsBusiness Operations and StrategyFinancial Disclosures
HealthStream Reports 2024 Financial Results and Growth
Positive
Feb 24, 2025
On February 24, 2025, HealthStream announced its financial results for the fourth quarter and full year of 2024, reporting a revenue increase of 5.2% for the quarter and 4.5% for the year. The company also declared a quarterly cash dividend and highlighted its strategic acquisitions and leadership promotions, which are expected to enhance its market position and operational efficiency.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.