📊 HSTM Key Takeaways
Is HSTM a Good Investment? Thesis Analysis
HealthStream demonstrates solid cash generation ($59.6M FCF, 19.6% FCF margin) and a fortress balance sheet with zero debt, but underlying business quality is weak with low profitability margins (6.7% operating margin), minimal returns on capital (ROE 5.2%, ROA 3.5%), and decelerating earnings (EPS down 7.6% YoY) despite modest revenue growth. The significant gap between operating cash flow and net income warrants scrutiny.
Why Buy HSTM? Key Strengths
- Zero long-term debt with $354M equity provides financial flexibility and stability
- Strong free cash flow generation of $59.6M (19.6% FCF margin) demonstrates underlying operational resilience
- Asset-light model with minimal capital requirements ($3.7M CapEx) supports cash conversion efficiency
HSTM Investment Risks to Consider
- Margin compression evident from 7.6% EPS decline despite 4.3% revenue growth, indicating deteriorating profitability
- Critically tight liquidity with current ratio of 0.96x below safety threshold, constraining operational flexibility
- Anemic returns on capital (ROE 5.2%, ROA 3.5%) signal chronic capital inefficiency and weak competitive positioning
Key Metrics to Watch
- Operating margin trend and revenue growth acceleration to assess business trajectory
- Current ratio improvement toward 1.2x+ to alleviate liquidity concerns
- Free cash flow sustainability relative to net income divergence to understand accounting quality
HSTM Financial Metrics
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
HSTM Profitability Ratios
HSTM vs Technology Sector
How HEALTHSTREAM INC compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is HSTM Overvalued or Undervalued?
Based on fundamental analysis, HEALTHSTREAM INC has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
HSTM Balance Sheet & Liquidity
HSTM 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: HEALTHSTREAM INC's revenue has grown significantly by 18% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.50 reflects profitable operations.
HSTM Growth Metrics (YoY)
HSTM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $73.1M | $4.2M | $0.19 |
| Q2 2025 | $71.6M | $4.2M | $0.14 |
| Q1 2025 | $72.8M | $4.3M | $0.14 |
| Q3 2024 | $70.3M | $2.6M | $0.13 |
| Q2 2024 | $69.2M | $2.6M | $0.13 |
| Q1 2024 | $68.9M | $2.6M | $0.09 |
| Q3 2023 | $67.3M | $2.6M | $0.12 |
| Q2 2023 | $65.6M | $2.6M | $0.10 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HSTM Capital Allocation
HSTM SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for HEALTHSTREAM INC (CIK: 0001095565)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HSTM
What is the AI rating for HSTM?
HEALTHSTREAM INC (HSTM) has an AI rating of HOLD with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are HSTM's key strengths?
Claude: Zero long-term debt with $354M equity provides financial flexibility and stability. Strong free cash flow generation of $59.6M (19.6% FCF margin) demonstrates underlying operational resilience.
What are the risks of investing in HSTM?
Claude: Margin compression evident from 7.6% EPS decline despite 4.3% revenue growth, indicating deteriorating profitability. Critically tight liquidity with current ratio of 0.96x below safety threshold, constraining operational flexibility.
What is HSTM's revenue and growth?
HEALTHSTREAM INC reported revenue of $304.1M.
Does HSTM pay dividends?
HEALTHSTREAM INC pays dividends, with $3.7M distributed to shareholders in the trailing twelve months.
Where can I find HSTM SEC filings?
Official SEC filings for HEALTHSTREAM INC (CIK: 0001095565) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HSTM's EPS?
HEALTHSTREAM INC has a diluted EPS of $0.61.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HSTM a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, HEALTHSTREAM INC has a HOLD rating with 72% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is HSTM stock overvalued or undervalued?
Valuation metrics for HSTM: ROE of 5.2% (sector avg: 22%), net margin of 6.0% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy HSTM stock in 2026?
Our dual AI analysis gives HEALTHSTREAM INC a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is HSTM's free cash flow?
HEALTHSTREAM INC's operating cash flow is $63.3M, with capital expenditures of $3.7M. FCF margin is 19.6%.
How does HSTM compare to other Technology stocks?
Vs Technology sector averages: Net margin 6.0% (avg: 18%), ROE 5.2% (avg: 22%), current ratio 0.96 (avg: 2.5).