📊 HSTM Key Takeaways
Is Healthstream Inc. (HSTM) a Good Investment?
HealthStream generates strong free cash flow (32.5% margin) with a fortress balance sheet (zero debt, $48.7M cash), but weak capital returns (ROE 1.7%, ROA 1.1%), modest revenue growth (4.3%), and declining EPS (-7.6%) indicate the company is efficient at cash generation but inefficient at deploying capital. Fundamentals suggest a mature, stable business lacking compelling growth momentum.
Steady low-single-digit revenue growth and a debt-free balance sheet support resilient fundamentals, with strong free cash flow and minimal capex needs. However, EPS declined and operating margins are modest, while a sub‑1.0 current ratio indicates reliance on deferred revenue/working capital. Quality cash generation but limited visibility on margin expansion keeps the outlook balanced.
Why Buy Healthstream Inc. Stock? HSTM Key Strengths
- Exceptional free cash flow margin of 32.5% with $26.4M FCF demonstrates highly efficient operations and cash conversion
- Zero long-term debt with $48.7M cash provides financial fortress, eliminates refinancing risk, and enables strategic optionality
- Positive $27.1M operating cash flow reflects real, sustainable cash generation unencumbered by major capital needs (CapEx only $740K)
- Debt-free balance sheet with cash on hand
- Strong free cash flow and high cash conversion
- Consistent revenue growth with positive operating income
HSTM Stock Risks: Healthstream Inc. Investment Risks
- Critically weak return metrics (ROE 1.7%, ROA 1.1%) reveal poor capital deployment efficiency despite strong cash generation; $352M equity base underperforming
- Current ratio of 0.97x signals tight short-term liquidity with current liabilities slightly exceeding current assets; potential working capital constraint
- Declining diluted EPS (-7.6% YoY) combined with modest revenue growth (4.3%) indicates margin compression, share dilution, or both; suggests mature business lacking growth
- Margin pressure with declining EPS and modest operating margin
- Current ratio below 1.0, reflecting working-capital/deferred revenue reliance
- Low ROE/ROA indicating limited capital efficiency
Key Metrics to Watch
- Return on Equity and Return on Assets trajectory - must improve from current lows to justify large asset/equity base
- Revenue growth acceleration and operating margin stability - determine if 4.3% growth is sustainable or further deceleration
- Current ratio trend and days sales outstanding - monitor working capital management to prevent liquidity crisis
- Free cash flow sustainability and deployment - verify FCF maintenance if growth remains sluggish
- Operating margin trend
- Deferred revenue and billings growth
Healthstream Inc. (HSTM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 32.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
HSTM Profit Margin, ROE & Profitability Analysis
HSTM vs Technology Sector: How Healthstream Inc. Compares
How Healthstream Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Healthstream Inc. Stock Overvalued? HSTM Valuation Analysis 2026
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.
Healthstream Inc. Balance Sheet: HSTM Debt, Cash & Liquidity
HSTM Revenue & Earnings Growth: 5-Year Financial Trend
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 Revenue Growth, EPS Growth & YoY Performance
HSTM Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $73.5M | $4.3M | $0.14 |
| 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 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Healthstream Inc. Dividends, Buybacks & Capital Allocation
HSTM SEC Filings: Latest 10-K & 10-Q 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 a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HSTM's key strengths?
Claude: Exceptional free cash flow margin of 32.5% with $26.4M FCF demonstrates highly efficient operations and cash conversion. Zero long-term debt with $48.7M cash provides financial fortress, eliminates refinancing risk, and enables strategic optionality. ChatGPT: Debt-free balance sheet with cash on hand. Strong free cash flow and high cash conversion.
What are the risks of investing in HSTM?
Claude: Critically weak return metrics (ROE 1.7%, ROA 1.1%) reveal poor capital deployment efficiency despite strong cash generation; $352M equity base underperforming. Current ratio of 0.97x signals tight short-term liquidity with current liabilities slightly exceeding current assets; potential working capital constraint. ChatGPT: Margin pressure with declining EPS and modest operating margin. Current ratio below 1.0, reflecting working-capital/deferred revenue reliance.
What is HSTM's revenue and growth?
Healthstream Inc. reported revenue of $81.2M.
Does HSTM pay dividends?
Healthstream Inc. pays dividends, with $1.0M 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 $0.20.
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 May 2026, Healthstream Inc. has a HOLD rating with 70% 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 1.7% (sector avg: 22%), net margin of 7.3% (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 $27.1M, with capital expenditures of $740.0K. FCF margin is 32.5%.
How does HSTM compare to other Technology stocks?
Vs Technology sector averages: Net margin 7.3% (avg: 18%), ROE 1.7% (avg: 22%), current ratio 0.97 (avg: 2.5).