HealthStream (HSTM) AI Stock Analysis

• Market Cap: $859.59M
• Dividend Yield: 0.42%
• Average Volume (3M): 201.79K
• Price to Earnings (P/E): 43.6
• Beta (1Y): 0.55
• Revenue Growth: 3.50%
• EPS Growth: 13.99%
• Country: US
• Employees: 1,083
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.18
• Shares Outstanding: 29,641,207
• 10 Day Avg. Volume: 221,056
• 30 Day Avg. Volume: 201,795
• PEG Ratio: 1.51
• Price to Book (P/B): 2.69
• Price to Sales (P/S): 3.31
• P/FCF Ratio: 32.74
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 2.60
• Enterprise Value/Gross Profit: 3.96
• Enterprise Value/Ebitda: 11.74
• 1Y Price Target: $33.33
• Price Target Upside: 14.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 75 Outperform
• Price Target: $32.00 ▲(9.81% Upside)

HealthStream's strong financial performance and strategic advancements in AI and core solutions are significant strengths. However, the high P/E ratio and technical indicators suggest caution due to potential overvaluation and short-term pullback risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for HealthStream's solutions, enhancing its market position and financial stability.

AI and Innovation

Integration of AI technologies positions HealthStream at the forefront of innovation, potentially driving future growth and competitive advantage.

Financial Strength

Strong financial performance and cash reserves provide HealthStream with flexibility to invest in growth opportunities and withstand market fluctuations.

Negative Factors

Gross Margin Decline

Declining gross margins due to rising costs could pressure profitability, affecting long-term financial health if not managed effectively.

Legacy Product Declines

Decreasing revenue from legacy products may indicate challenges in maintaining older product lines, impacting overall revenue stability.

Operational Challenges

Operational challenges with key products like CredentialStream could hinder efficiency and profitability, affecting long-term growth prospects.

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 fees for its software solutions and services. The company offers various subscription-based products, which provide healthcare organizations with ongoing access to its platforms and resources. Key revenue streams include fees from its learning management systems, which facilitate employee training and compliance, as well as patient engagement solutions that help enhance the patient experience. Additionally, HealthStream benefits from strategic partnerships with healthcare providers and organizations, which can lead to increased adoption of its solutions and additional revenue opportunities. The company's focus on the healthcare sector allows it to capitalize on the growing demand for effective workforce and patient management tools, contributing significantly to its earnings.

HealthStream Financial Statement Overview

Summary

HealthStream exhibits strong revenue growth and profitability, supported by a solid balance sheet with low leverage. While cash flow generation is improving, the conversion of earnings to free cash flow could be enhanced. Overall, the company is well-positioned financially, with opportunities to optimize operational efficiency further.

Income Statement

HealthStream demonstrates strong revenue growth with a TTM increase of 9.71%, indicating robust demand for its services. The gross profit margin remains healthy at 65.64%, reflecting efficient cost management. However, the EBIT margin has slightly decreased to 5.54%, suggesting increased operational costs. Overall, the company maintains a solid net profit margin of 6.89%, showcasing profitability.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.045, indicating prudent financial leverage. Return on equity is moderate at 5.70%, showing reasonable efficiency in generating profits from shareholders' equity. The equity ratio stands at 70.07%, reflecting a strong capital structure with significant equity financing.

Cash Flow

Operating cash flow to net income ratio is stable at 0.54, indicating good cash conversion from earnings. Free cash flow has grown by 6.99% TTM, highlighting improved cash generation. However, the free cash flow to net income ratio of 0.73 suggests that a portion of earnings is not translating into free cash flow, which could be a point of concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	295.21M	291.65M	279.06M	266.83M	256.71M	244.83M
Gross Profit	193.78M	193.71M	184.04M	175.68M	165.68M	155.49M
EBITDA	65.38M	62.53M	59.59M	53.53M	44.87M	46.01M
Net Income	20.34M	20.01M	15.21M	12.09M	5.84M	14.09M
Balance Sheet
Total Assets	500.15M	510.77M	499.94M	497.74M	486.75M	500.31M
Cash, Cash Equivalents and Short-Term Investments	90.62M	97.22M	71.13M	53.91M	51.95M	46.49M
Total Debt	15.89M	20.17M	20.25M	23.32M	26.18M	28.48M
Total Liabilities	149.58M	151.41M	159.19M	163.68M	147.73M	166.25M
Stockholders Equity	350.57M	359.36M	340.75M	334.06M	339.02M	334.06M
Cash Flow
Free Cash Flow	45.32M	29.52M	35.96M	26.09M	17.04M	17.07M
Operating Cash Flow	62.37M	57.66M	63.97M	51.19M	42.38M	35.87M
Investing Cash Flow	-33.34M	-33.97M	-56.60M	-28.39M	-25.72M	-110.41M
Financing Cash Flow	-23.04M	-4.52M	-13.04M	-23.70M	-6.21M	-20.49M

HealthStream Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.14
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 29.14 is above the 20-day moving average (MA) of 28.66, above the 50-day MA of 27.44, and below the 200-day MA of 29.92, indicating a neutral trend. The MACD of 0.48 indicates Positive momentum. The RSI at 62.14 is Neutral, neither overbought nor oversold. The STOCH value of 43.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSTM.

HealthStream Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSTM	75 Outperform	$859.59M	43.59	5.81%	0.42%	3.50%	13.99%
PHR	66 Neutral	1.42B	-57.01	-8.07%	―	15.31%	77.02%
EVH	51 Neutral	1.05B	-5.57	-18.04%	―	-6.71%	-71.40%
TDOC	51 Neutral	1.44B	-6.83	-14.58%	―	-2.57%	79.86%
HCAT	49 Neutral	197.05M	-1.85	-28.81%	―	5.55%	-0.99%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

HealthStream Corporate Events

HealthStream Reports Record Q2 2025 Revenue Growth

On August 4, 2025, HealthStream announced its second quarter 2025 results, reporting a record revenue of $74.4 million, a 4% increase from the previous year. The company also declared a quarterly cash dividend and highlighted a significant improvement in operating income and net income compared to the second quarter of 2024. Additionally, HealthStream’s Board of Directors authorized a share repurchase program, which was completed in July 2025.