Critical Analysis: HealthStream (HSTM) & Select Medical Holdings (SEM)
HealthStream (NASDAQ: HSTM) and Select Medical Holdings (NYSE:SEM) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.
Risk & Volatility
HealthStream has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Select Medical Holdings has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.
This table compares HealthStream and Select Medical Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Select Medical Holdings||2.26%||9.12%||1.96%|
This is a breakdown of recent ratings and target prices for HealthStream and Select Medical Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Select Medical Holdings||1||1||4||0||2.50|
HealthStream currently has a consensus price target of $24.40, suggesting a potential upside of 5.13%. Select Medical Holdings has a consensus price target of $19.60, suggesting a potential upside of 15.63%. Given Select Medical Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Select Medical Holdings is more favorable than HealthStream.
Institutional and Insider Ownership
77.0% of HealthStream shares are owned by institutional investors. Comparatively, 78.9% of Select Medical Holdings shares are owned by institutional investors. 21.1% of HealthStream shares are owned by insiders. Comparatively, 19.9% of Select Medical Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares HealthStream and Select Medical Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|HealthStream||$225.97 million||3.28||$3.75 million||$0.18||128.95|
|Select Medical Holdings||$4.29 billion||0.53||$115.41 million||$0.73||23.22|
Select Medical Holdings has higher revenue and earnings than HealthStream. Select Medical Holdings is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.
Select Medical Holdings beats HealthStream on 10 of the 14 factors compared between the two stocks.
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 Select Medical Holdings
Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.
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