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HealthStream
(NASDAQ:HSTM)
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Rating:76Outperform
Price Target:
$40.00
▲(39.08% Upside)
Action:Reiterated
Date:09/15/26
The score is driven primarily by strong financial performance (steady growth, improving margins, low leverage, and solid cash generation). Technicals are supportive with an uptrend and positive MACD. The main constraint is valuation (high P/E with a modest yield). Earnings call factors are positive overall due to raised guidance and strong subscription momentum, tempered by one-time revenue benefit, higher investment-driven expenses, and the disclosed cybersecurity incident under investigation.
Positive Factors
Recurring Revenue Visibility
The subscription-heavy model and substantial remaining performance obligations provide meaningful revenue visibility beyond the current quarter. With much of contracted value expected to convert over the next 24 months, HealthStream has a durable base for planning investment and sustaining growth.
Negative Factors
Legacy Product Decline
Customer migration away from legacy credentialing and scheduling products creates a continuing source of revenue pressure. Newer offerings may offset the decline, but the transition can weigh on growth, require implementation resources, and make sustained expansion dependent on successful product conversion.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Revenue Visibility
The subscription-heavy model and substantial remaining performance obligations provide meaningful revenue visibility beyond the current quarter. With much of contracted value expected to convert over the next 24 months, HealthStream has a durable base for planning investment and sustaining growth.
Read all positive factors
HealthStream Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue down by product and service lines (for example, subscription software, professional services, and content licensing) to show which parts of the business drive growth and profits. A larger recurring subscription mix suggests more predictable cash flow and higher margins, while reliance on one-time or services revenue can mean lower margin potential and less revenue visibility. Shifts in these shares highlight where the company is gaining traction, facing competitive pressure, or exposed to customer concentration or healthcare spending cycles.
Breaks revenue down by product and service lines (for example, subscription software, professional services, and content licensing) to show which parts of the business drive growth and profits. A larger recurring subscription mix suggests more predictable cash flow and higher margins, while reliance on one-time or services revenue can mean lower margin potential and less revenue visibility. Shifts in these shares highlight where the company is gaining traction, facing competitive pressure, or exposed to customer concentration or healthcare spending cycles.
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The Fly
The FlyHealthStream (HSTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.07B
Dividend Yield0.39%
Average Volume (3M)191.40K
Price to Earnings (P/E)48.7
Beta (1Y)0.65
Revenue Growth8.78%
EPS Growth7.61%
CountryUS
Employees1,150
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.72
Shares Outstanding30,595,886
10 Day Avg. Volume191,310
30 Day Avg. Volume191,401
Financial Highlights & Ratios
PEG Ratio-4.99
Price to Book (P/B)1.96
Price to Sales (P/S)2.28
P/FCF Ratio11.61
Enterprise Value/Market Cap0.70
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda10.39
Forecast
1Y Price Target
$32.50Price Target Upside13.00% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.74
Revenue Forecast (FY)$329.93M
HealthStream Business Overview & Revenue Model
Company Description
HealthStream, Inc., established in 1990 and headquartered in Nashville, Tennessee, delivers specialized workforce and provider solutions to healthcare organizations throughout the United States. Its operations are divided into two primary segments...
How the Company Makes Money
HealthStream primarily generates revenue by selling subscriptions to its SaaS platforms and related solutions to healthcare organizations. A major revenue stream is recurring subscription fees for access to its learning, workforce, and credentiali...
HealthStream Earnings Call Summary
Earnings Call Date:Aug 03, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial performance with record revenue, record adjusted EBITDA, strong product growth (notably ShiftWizard and myClinicalExchange), expanding platform capabilities (Insights/hStream) and robust cash flow and balance sheet. Management also increased guidance for revenue and adjusted EBITDA for 2026. Offsetting factors include a $2M non-recurring revenue catch-up that boosted results, rising operating expenses tied to deliberate investments (career networks, product development and sales expansion) that trimmed net income guidance, ongoing migration away from legacy products, a disclosed cybersecurity incident under investigation, and expectations for slower revenue growth in the second half. Overall, the positive items meaningfully outweigh the negatives, though investors should note the one-time revenue impact and near-term cost/investment dynamics.Positive Updates
Record Revenue and Profitability
Second-quarter revenue of $83.7M, up 12.5% year-over-year; record adjusted EBITDA of $20.6M, up 16.9% year-over-year; operating income up 41.4% to $8.3M; net income $6.7M, up 23.8%; EPS $0.23 vs $0.18 prior year.
Negative Updates
Non-Recurring Revenue Boost
Second-quarter included a $2.0M one-time revenue catch-up related to a contingent-fee contract (ANSOS acquisition) that boosted Q2 results; company said this revenue is non-recurring and incremental to prior expectations.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Profitability
Second-quarter revenue of $83.7M, up 12.5% year-over-year; record adjusted EBITDA of $20.6M, up 16.9% year-over-year; operating income up 41.4% to $8.3M; net income $6.7M, up 23.8%; EPS $0.23 vs $0.18 prior year.
Read all positive updates
Company Guidance
HealthStream updated 2026 guidance to consolidated revenues of $327–332 million (growth of 7.5%–9.2% vs. 2025), net income of $19.5–22.2 million, adjusted EBITDA of $74–78 million, and capital expenditures of $31–34 million; management expects Q3 revenue growth of ~8% and Q3 adjusted EBITDA margin of ~22%. The update follows a strong Q2 (revenues $83.7M, +12.5% Y/Y; adjusted EBITDA $20.6M, +16.9%, margin 24.6%; operating income $8.3M, +41.4%; net income $6.7M, +23.8%; EPS $0.23) and reflects elective investments (15 new career‑network hires) and higher H2 operating expenses; Q2 results were aided by a $2M one‑time revenue catch‑up. Remaining performance obligations were $685M (≈40% recognized in 12 months, 68% in 24 months), cash & investments were $66.7M, DSO 38 days, YTD operating cash flow $40.6M and YTD free cash flow $24.7M.HealthStream Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
88
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 321.12M | 304.06M | 291.65M | 279.06M | 266.83M | 256.71M |
| Gross Profit | 208.98M | 196.85M | 193.71M | 184.04M | 175.68M | 165.68M |
| EBITDA | 71.74M | 66.70M | 66.05M | 59.59M | 53.53M | 44.58M |
| Net Income | 21.20M | 18.34M | 20.01M | 15.21M | 12.09M | 5.84M |
Balance Sheet | ||||||
| Total Assets | 521.60M | 520.37M | 510.77M | 499.94M | 497.74M | 486.75M |
| Cash, Cash Equivalents and Short-Term Investments | 66.73M | 57.00M | 97.22M | 71.13M | 53.91M | 51.95M |
| Total Debt | 13.43M | 14.68M | 20.17M | 20.25M | 23.32M | 29.11M |
| Total Liabilities | 164.99M | 166.35M | 151.41M | 159.19M | 163.68M | 147.73M |
| Stockholders Equity | 356.61M | 354.02M | 359.36M | 340.75M | 334.06M | 339.02M |
Cash Flow | ||||||
| Free Cash Flow | 48.85M | 59.63M | 29.52M | 61.77M | 49.42M | 38.97M |
| Operating Cash Flow | 71.79M | 63.32M | 57.66M | 63.97M | 51.19M | 42.38M |
| Investing Cash Flow | -50.16M | -50.35M | -33.97M | -56.60M | -28.39M | -25.72M |
| Financing Cash Flow | -27.52M | -36.27M | -4.52M | -13.04M | -23.70M | -6.21M |
HealthStream Technical Analysis
Positive
28.76
Price Trends
30.50
Positive
28.99
Positive
25.30
Positive
Market Momentum
1.29
Negative
74.54
Negative
89.37
Negative
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 28.76 is below the 20-day moving average (MA) of 32.71, below the 50-day MA of 30.50, and above the 200-day MA of 25.30, indicating a bullish trend. The MACD of 1.29 indicates Negative momentum. The RSI at 74.54 is Negative, neither overbought nor oversold. The STOCH value of 89.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HSTM.
HealthStream Risk Analysis
HealthStream disclosed 38 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.07B | 48.71 | 6.01% | 0.39% | 8.78% | 7.61% | |
74 Outperform | $213.57M | 17.14 | 8.50% | 12.24% | -3.39% | -29.34% | |
66 Neutral | $782.71M | 73.23 | 3.01% | ― | 12.93% | ― | |
54 Neutral | $156.43M | -0.68 | -78.52% | ― | -4.99% | 39.52% | |
53 Neutral | $122.67M | -0.44 | -129.70% | ― | -7.54% | -143.41% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
50 Neutral | $496.58M | 85.52 | 48.46% | 2.85% | -0.23% | -67.40% |
* Healthcare Sector Average
HSTM
HealthStream
34.86
9.04
34.99%
SPOK
Spok Holdings
10.21
-4.48
-30.49%
NRC
National Research
22.45
11.41
103.28%
PHR
Phreesia
12.61
-10.86
-46.27%
HCAT
Health Catalyst
1.63
-1.83
-52.89%
DH
Definitive Healthcare Corp
1.08
-1.89
-63.64%
HealthStream Corporate Events
Business Operations and StrategyPrivate Placements and Financing
HealthStream Raises Growth Capital in Governance-Conscious Placement
Positive
Sep 15, 2026
On September 14, 2026, HealthStream completed a private placement in which WJRJJ Ventures, LLC acquired a total of 1.5 million shares of its common stock at $29.50 per share, including approximately $40 million of newly issued shares from the comp...
Business Operations and StrategyPrivate Placements and Financing
HealthStream Amends Revolving Credit Facility to Extend Liquidity
Positive
Sep 14, 2026
On September 10, 2026, HealthStream, Inc. amended its existing revolving credit facility by entering into a Second Amendment to its Amended and Restated Revolving Credit Agreement, maintaining a $50 million unsecured revolving line with a $5 milli...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
HealthStream Posts Strong Q2 Results and Raises Guidance
Positive
Aug 3, 2026
On August 3, 2026, HealthStream reported strong second-quarter 2026 results, with revenue rising 12.5% year over year to a record $83.7 million, driven by subscription and professional services growth and contributions from recent acquisitions. Op...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.