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Healthstream (HSTM)
NASDAQ:HSTM
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HealthStream
(NASDAQ:HSTM)
67Neutral
Positive Factors
Financial Performance
HealthStream reported Q3/24 non-GAAP EPS of $0.19, which exceeded our forecast and the FactSet consensus forecast of $0.13.
New Product Performance
Newer products in CredentialStream and ShiftWizard continue to perform well, posting year-over-year growth of 28% and 17%, respectively.
Negative Factors
Legacy Product Challenges
The growth continues to be overshadowed by declines in legacy products, which created a $1 million headwind in the quarter and continues to weigh down revenue growth.
HealthStream (HSTM) vs. S&P 500 (SPY)
Market Cap
$960.81M
Dividend Yield0.34%
Average Volume (3M)150.13K
Price to Earnings (P/E)50.1
Beta (1Y)0.57
Revenue Growth4.51%
EPS Growth32.28%
CountryUS
Employees1,092
SectorHealthcare
Sector Strength78
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)0.66
Shares Outstanding30,434,310
10 Day Avg. Volume206,415
30 Day Avg. Volume150,128
Financial Highlights & Ratios
PEG Ratio1.55
Price to Book (P/B)N/A
Price to Sales (P/S)3.43
Price to Cash Flow (P/CF)22.40
P/FCF Ratio22.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.50Price Target Upside11.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
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 shows consistent revenue growth and improved profit margins, indicating operational strength. The balance sheet is robust with low leverage, and cash flow is strong, although there's room for better cash conversion efficiency.Income Statement
HealthStream has demonstrated consistent revenue growth, with a 4.5% increase from 2023 to 2024. The gross profit margin for 2024 stands at 66.4%, indicating a strong ability to generate profit from its operations. The net profit margin improved to 6.9% in 2024 from 5.4% in 2023, showing enhanced profitability. EBIT and EBITDA margins are also healthy at 7.3% and 22.6% respectively, reflecting efficient operating performance. However, the EBIT margin is relatively low compared to industry standards, indicating room for operational efficiency improvements.75
Positive
Balance Sheet
The company's balance sheet is robust with a low debt-to-equity ratio of 0.05, reflecting low financial leverage. Return on Equity (ROE) has improved to 5.6% in 2024 from 4.5% in 2023, showing better utilization of shareholders' equity to generate profit. The equity ratio is strong at 70.3%, indicating a solid equity foundation with minimal reliance on external debt. These metrics highlight a stable financial structure with low risk of insolvency, although the ROE is still below industry averages, suggesting potential for improvement in profit generation from equity.80
Positive
Cash Flow
Free cash flow increased significantly by 56.5% from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 2.88 in 2024 suggests robust cash generation relative to net income, enhancing liquidity. However, the free cash flow to net income ratio decreased slightly to 2.81 from 2.36 in the previous year, suggesting a minor reduction in cash conversion efficiency. Overall, the cash flow position remains strong, though maintaining and improving cash conversion efficiency will be crucial.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 291.65M | 279.06M | 266.83M | 256.71M | 244.83M | Gross Profit |
| 193.71M | 184.04M | 175.68M | 165.68M | 155.49M | EBIT |
| 21.29M | 16.02M | 12.45M | 8.05M | 15.82M | EBITDA |
| 62.53M | 59.59M | 50.39M | 44.87M | 46.01M | Net Income Common Stockholders |
| 20.01M | 15.21M | 12.09M | 5.84M | 14.09M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 97.22M | 71.13M | 53.91M | 51.95M | 46.49M | Total Assets |
| 510.77M | 499.94M | 497.74M | 486.75M | 500.31M | Total Debt |
| 17.37M | 20.25M | 23.32M | 26.18M | 28.48M | Net Debt |
| -42.10M | -20.09M | -22.70M | -20.73M | -8.09M | Total Liabilities |
| 151.41M | 159.19M | 163.68M | 147.73M | 166.25M | Stockholders Equity |
| 359.36M | 340.75M | 334.06M | 339.02M | 334.06M |
| Cash Flow | Free Cash Flow | |||
| 29.52M | 35.96M | 26.09M | 17.04M | 17.07M | Operating Cash Flow |
| 57.66M | 63.97M | 51.19M | 42.38M | 35.87M | Investing Cash Flow |
| -33.97M | -56.60M | -28.39M | -25.72M | -110.41M | Financing Cash Flow |
| -4.52M | -13.04M | -23.70M | -6.21M | -20.49M |
HealthStream Technical Analysis
Negative
30.98
Price Trends
32.58
Negative
31.83
Negative
30.07
Positive
Market Momentum
-0.03
Positive
36.34
Neutral
49.37
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 30.98 is below the 20-day moving average (MA) of 33.21, below the 50-day MA of 32.58, and above the 200-day MA of 30.07, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 36.34 is Neutral, neither overbought nor oversold. The STOCH value of 49.37 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.30B | 87.34 | 4.70% | ― | 18.47% | 227.77% | |
73 Outperform | $10.28B | 26.71 | 58.41% | ― | 11.84% | 42.04% | |
68 Neutral | $1.36B | 16.73 | 5.45% | ― | 1.90% | ― | |
67 Neutral | $960.81M | 50.12 | 5.72% | 0.34% | 4.51% | 32.28% | |
64 Neutral | $790.73M | 20.17 | 8.25% | ― | 2.65% | 3.34% | |
54 Neutral | $228.46M | ― | 1.10% | ― | 17.56% | 48.73% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% |
* Healthcare Sector Average
Performance Comparison
HSTM
HealthStream
30.98
4.99
19.20%
EHTH
Ehealth
7.62
1.36
21.73%
HCSG
Healthcare Services
11.03
-1.13
-9.29%
HQY
Healthequity
95.74
13.03
15.75%
MEDP
Medpace Holdings
325.87
-82.01
-20.11%
AHCO
AdaptHealth
10.12
-0.24
-2.32%
HealthStream Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -4.15% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Positive
HealthStream demonstrated strong financial performance with notable achievements such as significant growth in key revenue areas and recognition for its products. However, challenges remain with declines in legacy product revenues and increased bad debt charges. The overall sentiment suggests a company effectively navigating growth while addressing some financial headwinds.Highlights
Strong Financial Growth
Full year revenues increased by 4.5%, net income rose by 31.5%, operating income increased by 32.9%, and adjusted EBITDA grew by 9% year-over-year.
HStream Platform Progress
HStream platform saw significant progress with over 400 developers from 184 customer accounts accessing platform APIs, indicating growing maturity and utility.
Product Recognition and Awards
HealthStream Learning Center was named the number one software in all of healthcare by G2, and CredentialStream ranked number 5 overall in healthcare application software.
ShiftWizard Revenue Growth
ShiftWizard delivered strong revenue growth with a 17% increase over Q4 last year and a 25.1% increase over full year 2023.
CredentialStream Revenue Growth
CredentialStream experienced a 28% revenue growth over Q4 last year and a 35% growth over full year 2023.
Launch of HealthStream Learning Experience (HLX)
The HLX, the first application built on the HStream platform, was launched offering AI-powered, personalized learning for healthcare professionals.
Lowlights
Legacy Product Revenue Decline
Declines were noted in legacy products such as the ANSOS product suite, Echo, and MSOW, contributing to a $1 million decrease in Q4 revenue compared to the previous year.
Increased Bad Debt Charges
Bad debt charges increased to $2.6 million for 2024, up from $1 million in the prior year, primarily due to customer bankruptcies.
Decline in Free Cash Flow
Free cash flows were down $6.5 million or 17.9%, largely due to increased income tax payments of $6.1 million more compared to 2023.
Company Guidance
During HealthStream's fourth quarter and full year 2024 earnings call, CEO Robert Frist shared several key financial metrics and provided guidance for 2025. The company reported a 4.5% increase in full-year revenues, a 31.5% rise in net income, a 32.9% boost in operating income, and a 9% increase in adjusted EBITDA. Looking ahead to 2025, HealthStream anticipates organic revenue between $302 million and $307 million, net income ranging from $19.2 million to $21.4 million, and adjusted EBITDA between $70 million and $74 million. Despite no long-term debt and a strong cash balance of $97.2 million, potential acquisitions could influence these projections. Additionally, the company's strategic focus includes rekindling its M&A activities and advancing its HStream platform to foster interoperability among applications.HealthStream Corporate Events
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.