HealthStream (HSTM) AI Stock Analysis

• Market Cap: $810.98M
• Dividend Yield: 0.44%
• Average Volume (3M): 196.51K
• Price to Earnings (P/E): 41.1
• 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: 176,278
• 30 Day Avg. Volume: 196,506
• 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: 0.95
• Enterprise Value/Revenue: 2.60
• Enterprise Value/Gross Profit: 3.96
• Enterprise Value/Ebitda: 11.74
• 1Y Price Target: $33.00
• Price Target Upside: 20.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 73 Outperform
• Price Target: $31.00 ▲(13.30% Upside)

HealthStream's strong financial performance and strategic advancements, particularly in AI and deal closures, are significant strengths. However, the high valuation and technical indicators suggest caution. The earnings call provided positive sentiment, but challenges with legacy products and gross margin pressures remain.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for HealthStream's solutions, reinforcing its market position and potential for future expansion.

AI and Innovation

Integration of AI into products enhances HealthStream's competitive edge, driving innovation and improving service offerings, which can lead to increased adoption.

Financial Strength

Strong financial health with no debt and significant cash reserves provides flexibility for strategic investments and resilience against market fluctuations.

Negative Factors

Gross Margin Decline

Declining gross margins due to rising costs could pressure profitability if not managed, potentially impacting long-term financial performance.

Legacy Product Declines

Decreasing revenue from legacy products suggests challenges in maintaining older product lines, which could affect overall revenue if not addressed.

Operational Challenges

Operational issues with scaling technology can increase costs and hinder efficiency, potentially impacting profitability and growth if unresolved.

HealthStream Business Overview & Revenue Model

Company Description

HealthStream (HSTM) is a leading provider of workforce and patient experience solutions for the healthcare industry. The company focuses on improving healthcare organizations' performance through a comprehensive suite of cloud-based solutions that address training, compliance, and engagement needs. HealthStream's core products include learning management systems, workforce management tools, and patient experience solutions, which are designed to enhance the quality of care and operational efficiency within healthcare settings.

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: Negative
• Last Price: 27.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 27.36 is below the 20-day moving average (MA) of 28.67, below the 50-day MA of 27.60, and below the 200-day MA of 29.79, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 36.36 is Neutral, neither overbought nor oversold. The STOCH value of 12.79 is Positive, 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	73 Outperform	$810.98M	41.12	5.81%	0.44%	3.50%	13.99%
NUTX	71 Outperform	$595.45M	9.06	51.65%	―	141.25%	―
OMDA	58 Neutral	$1.26B	―	―	―	47.99%	44.25%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
EVH	51 Neutral	$967.10M	―	-13.38%	―	-6.71%	-71.40%
HCAT	49 Neutral	$208.31M	―	-28.42%	―	5.55%	-0.99%
DH	46 Neutral	$487.29M	―	-64.27%	―	-5.24%	23.59%

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.