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

Insider and Institutional Ownership

75.9% of HealthStream shares are owned by institutional investors. Comparatively, 37.9% of Streamline Health Solutions shares are owned by institutional investors. 21.1% of HealthStream shares are owned by company insiders. Comparatively, 26.1% of Streamline Health Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for HealthStream and Streamline Health Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HealthStream 0 3 3 0 2.50
Streamline Health Solutions 0 0 0 0 N/A

HealthStream currently has a consensus target price of $25.17, suggesting a potential upside of 6.50%. Given HealthStream’s higher possible upside, research analysts clearly believe HealthStream is more favorable than Streamline Health Solutions.

Profitability

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

Net Margins Return on Equity Return on Assets
HealthStream 1.85% 2.27% 1.65%
Streamline Health Solutions -24.50% -56.04% -15.49%

Volatility and Risk

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

Earnings and Valuation

This table compares HealthStream and Streamline Health Solutions’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HealthStream $238.45 million 3.16 $23.61 million $0.14 168.79
Streamline Health Solutions $24.86 million 1.20 -$3.83 million ($0.31) -4.84

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 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.

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.

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