Analyzing Weave Communications (NYSE:WEAV) & HealthStream (NASDAQ:HSTM)

Weave Communications (NYSE:WEAV) and HealthStream (NASDAQ:HSTM) are both small-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Weave Communications and HealthStream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Weave Communications	-7.97%	-21.14%	-8.41%
HealthStream	6.60%	6.81%	4.64%

Institutional & Insider Ownership

86.8% of Weave Communications shares are owned by institutional investors. Comparatively, 69.6% of HealthStream shares are owned by institutional investors. 16.4% of Weave Communications shares are owned by insiders. Comparatively, 20.4% of HealthStream 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 Weave Communications and HealthStream”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Weave Communications	$239.02 million	2.47	-$28.05 million	($0.25)	-29.50
HealthStream	$321.12 million	2.85	$18.34 million	$0.72	43.49

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

Risk & Volatility

Weave Communications has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Weave Communications and HealthStream, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Weave Communications	1	5	2	0	2.12
HealthStream	0	3	0	0	2.00

Weave Communications currently has a consensus target price of $7.84, suggesting a potential upside of 6.31%. HealthStream has a consensus target price of $27.00, suggesting a potential downside of 13.77%. Given Weave Communications’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Weave Communications is more favorable than HealthStream.

Summary

HealthStream beats Weave Communications on 9 of the 14 factors compared between the two stocks.

About Weave Communications

Weave Communications, Inc. provides a customer experience and payments software platform in the United States and Canada. Its platform enables small and medium-sized healthcare businesses to maximize the value of their patient interactions and minimize the time and effort spent on manual or mundane tasks. The company's products include Unified Phone Number; Customized Phone System, a smarter phone system to identify whether incoming calls are from new or current patients, provide information at every call, and manages heavy call times; Softphones to make and receive calls from anywhere with an internet connection; Text Messaging to communicate with patients; Missed Call Text to take action in real time upon notification of a missed call; Missed Text Auto-Reply; Team Chat, a group messaging solution that helps practitioners and their staff communicate with each other from their work stations; and Weave Mobile App; It also offers Weave Reviews and Respond Assistant to request, collect, monitor, and respond to reviews; Weave Email Marketing and Email Assistant; Text Connect to interact with their existing and potential patients online directly through their websites; Weave Payments, a payment processing solution; Practice Analytics provides real-time data on patient retention, appointment scheduling, treatment acceptance rates, and revenue generation; and Call Intelligence. In addition, the company provides Digital Forms to collect patient information; Insurance Verification that provides patient insurance plan details; and Scheduling to send automatic scheduling reminders through text message. It serves customers in dental, optometry, veterinary, medical, plastic surgery, physical therapy, medical spa, and other medical specialty industries. The company was formerly known as Recall Solutions, LLC and changed its name to Weave Communications, Inc. in October 2015. Weave Communications, Inc. was founded in 2008 and is headquartered in Lehi, Utah.

About HealthStream

HealthStream, Inc. provides Software-as-a-Service (SaaS) based applications for healthcare organizations in the United States. The company’s solutions help healthcare organizations in meeting their ongoing clinical development, talent management, training, education, assessment, competency management, safety and compliance, and scheduling, as well as provider credentialing, privileging, and enrollment needs. It offers hStream, a technology platform that powers a range of healthcare workforce solutions. The company provides its solutions to customers across a range of entities within the healthcare industry, including private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through its direct sales teams. The company was incorporated in 1990 and is headquartered in Nashville, Tennessee.