Critical Review: HealthStream (NASDAQ:HSTM) and Streamline Health Solutions (STRM)

Streamline Health Solutions (NASDAQ: STRM) and HealthStream (NASDAQ:HSTM) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.

Analyst Ratings

This is a summary of current ratings and recommmendations for Streamline Health Solutions and HealthStream, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Streamline Health Solutions 0 0 0 0 N/A
HealthStream 0 4 2 0 2.33

HealthStream has a consensus target price of $24.83, suggesting a potential upside of 7.27%. Given HealthStream’s higher probable upside, analysts plainly believe HealthStream is more favorable than Streamline Health Solutions.

Profitability

This table compares Streamline Health Solutions and HealthStream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Streamline Health Solutions -24.50% -56.04% -15.49%
HealthStream 2.36% 2.46% 1.79%

Risk and Volatility

Streamline Health Solutions has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

37.9% of Streamline Health Solutions shares are owned by institutional investors. Comparatively, 75.9% of HealthStream shares are owned by institutional investors. 26.1% of Streamline Health Solutions shares are owned by insiders. Comparatively, 21.1% of HealthStream shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Streamline Health Solutions and HealthStream’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Streamline Health Solutions $24.86 million 1.32 -$3.83 million ($0.31) -5.32
HealthStream $238.45 million 3.10 $23.61 million $0.18 128.62

HealthStream has higher revenue and earnings than Streamline Health Solutions. Streamline Health Solutions is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.

Summary

HealthStream beats Streamline Health Solutions on 11 of the 12 factors compared between the two stocks.

About Streamline Health Solutions

Streamline Health Solutions, Inc. is engaged in providing healthcare information technology through the licensing of its Electronic Health Information Management, Patient Financial, Coding and Clinical Documentation Improvement (CDI), and other Workflow software applications, and the use of such applications by software as a service. The Company also provides implementation and consulting services to complement its software solutions. The Company provides computer software-based solutions through its Looking Glass platform. The Company sells its solutions and services in North America to hospitals and health systems, including physician practices, through its direct sales force and its reseller partnerships. The Company’s software and services allow hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information.

About HealthStream

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

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