HealthStream, Inc. (HSTM)
Valuation Overview•Is HealthStream, Inc. Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Moderate quality score of 59/100, reflecting stable operating margins and manageable leverage.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is cautious, forecasting potential downside with steady expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
HSTM demonstrates adequate business quality with stable profitability. This is backed by a fortress balance sheet, holding significant net cash ($21M) and minimal debt risk.
The company exhibits steady, low-single-digit revenue growth paired with robust earnings compounding (16.1% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 7.5%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $81.2M | +4.3% | +4.5% | +4.4% | +3.8% | |
| EBITDA | $18.9M | — | +8.1% | — | — | |
| Net Income | $5.9M | -8.3% | +14.9% | — | +7.8% | |
| EPS (Diluted) | $0.20 | -7.6% | +16.1% | +6.8% | +8.1% | |
| Free Cash Flow | $26.4M | +102.0% | +6.5% | +12.0% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 64.9% | 65.7% | 65.5% | 62.3% |
| Operating Margin | 7.5% | 6.6% | 5.5% | 5.3% |
| Net Margin | 6.4% | 6.1% | 5.0% | 5.7% |
| FCF Margin | 19.2% | 17.3% | 17.1% | 14.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.16 | $0.20 | +25.0% | ||
| Q1'26 | $0.16 | $0.18 | +12.5% | ||
| Q4'25 | $0.17 | $0.20 | +17.6% | ||
| Q3'25 | $0.16 | $0.18 | +12.5% | ||
| Q2'25 | $0.16 | $0.14 | -12.5% | ||
| Q1'25 | $0.13 | $0.16 | +23.1% | ||
| Q4'24 | $0.13 | $0.19 | +46.2% | ||
| Q3'24 | $0.12 | $0.14 | +16.7% |
Total return is -6.0% (1Y), lagging the benchmark by -31.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +12.8% | +3.5% | — |
| 1Y | -6.0% | -31.0% | +0.5% |
| 3YCAGR | +1.7% | -17.4% | +1.4% |
| 5YCAGR | +0.2% | -12.7% | +1.6% |
| 10YCAGR | +0.5% | -12.9% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about HealthStream, Inc. (HSTM) valuation, health, and returns.
Based on peer relative multiples, HealthStream, Inc. appears Slightly expensive versus peers compared to industry peers.
HealthStream, Inc. has multiple valuation anchors: Peer Relative Fair Value: $22.74 | Wall Street Analyst Target: $24.00 (implying -6.4% upside). A convergence of these signals offers higher conviction.
HealthStream, Inc. displays fair financial health with a composite quality score of 59/100, supported by a Altman Z-Score of 3.7 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 4.7%.
HealthStream, Inc. pays a 0.5% dividend yield, covered by a 20% payout ratio with 2 years of growth, supplemented by a 4.0% buyback yield.
HealthStream, Inc.'s current growth trajectory is Stable. The company achieved +4.3% 1Y revenue growth and -7.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +4.5%.
Wall Street consensus is Hold based on 16 analysts, beating EPS expectations in 92% of recent quarters with a 4-quarter streak. The consensus price target represents a -6.4% change from current levels.
Investment risks for HealthStream, Inc. include: -32.2% 1-year max drawdown. Volatility risk is characterized by a beta of 0.42x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.