HealthStream, Inc.
HealthStream, Inc. Fundamental Analysis
HealthStream, Inc. (HSTM) shows weak financial fundamentals with a PE ratio of 30.02, profit margin of 6.93%, and ROE of 5.82%. The company generates $0.3B in annual revenue with moderate year-over-year growth of 4.51%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 44.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HSTM's fundamental strength across five key dimensions:
Efficiency Score
WeakHSTM struggles to generate sufficient returns from assets.
Valuation Score
WeakHSTM trades at a premium to fair value.
Growth Score
ModerateHSTM shows steady but slowing expansion.
Financial Health Score
ExcellentHSTM maintains a strong and stable balance sheet.
Profitability Score
WeakHSTM struggles to sustain strong margins.
Key Financial Metrics
Is HSTM Expensive or Cheap?
P/E Ratio
HSTM trades at 30.02 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HSTM's PEG of 20.11 indicates potential overvaluation.
Price to Book
The market values HealthStream, Inc. at 1.78 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.74 times EBITDA. This is generally considered low.
How Well Does HSTM Make Money?
Net Profit Margin
For every $100 in sales, HealthStream, Inc. keeps $6.93 as profit after all expenses.
Operating Margin
Core operations generate 7.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.82 in profit for every $100 of shareholder equity.
ROA
HealthStream, Inc. generates $4.14 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
HealthStream, Inc. produces operating cash flow of $59.75M, showing steady but balanced cash generation.
Free Cash Flow
HealthStream, Inc. generates strong free cash flow of $56.16M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.89 in free cash annually.
FCF Yield
HSTM converts 9.53% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
30.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
20.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.78
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.03
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.04
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.31
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How HSTM Stacks Against Its Sector Peers
| Metric | HSTM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 30.02 | 29.43 | Neutral |
| ROE | 5.82% | 800.00% | Weak |
| Net Margin | 6.93% | -20145.00% (disorted) | Weak |
| Debt/Equity | 0.04 | 0.30 | Strong (Low Leverage) |
| Current Ratio | 1.31 | 4.64 | Neutral |
| ROA | 4.14% | -17936.00% (disorted) | Weak |
HSTM outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews HealthStream, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
22.27%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
35.16%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
-6.44%
Industry Style: Defensive, Growth, Innovation
Declining