HealthStream (NASDAQ:HSTM – Get Free Report) and Definitive Healthcare (NASDAQ:DH – Get Free Report) are both small-cap healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.
Analyst Recommendations
This is a summary of recent recommendations for HealthStream and Definitive Healthcare, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| HealthStream | 0 | 3 | 0 | 0 | 2.00 |
| Definitive Healthcare | 3 | 6 | 0 | 1 | 1.90 |
HealthStream presently has a consensus price target of $27.00, indicating a potential downside of 7.53%. Definitive Healthcare has a consensus price target of $1.47, indicating a potential upside of 40.14%. Given Definitive Healthcare’s higher probable upside, analysts plainly believe Definitive Healthcare is more favorable than HealthStream.
Volatility and Risk
Profitability
This table compares HealthStream and Definitive Healthcare’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| HealthStream | 6.60% | 6.81% | 4.64% |
| Definitive Healthcare | -72.28% | 3.55% | 1.63% |
Earnings & Valuation
This table compares HealthStream and Definitive Healthcare”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| HealthStream | $304.06 million | 2.81 | $18.34 million | $0.72 | 40.56 |
| Definitive Healthcare | $241.52 million | 0.46 | -$138.93 million | ($1.60) | -0.66 |
HealthStream has higher revenue and earnings than Definitive Healthcare. Definitive Healthcare is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
69.6% of HealthStream shares are held by institutional investors. Comparatively, 98.7% of Definitive Healthcare shares are held by institutional investors. 20.4% of HealthStream shares are held by insiders. Comparatively, 17.1% of Definitive Healthcare shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
HealthStream beats Definitive Healthcare on 10 of the 14 factors compared between the two stocks.
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.
About Definitive Healthcare
Definitive Healthcare Corp., together with its subsidiaries, provides software as a service (SaaS) healthcare commercial intelligence platform in the United States and internationally. Its SaaS platform provides information on healthcare providers and their activities to help its customers from product development to go-to-market planning, and sales and marketing execution. The company's platform consists of various functional areas, such as sales, marketing, clinical research and product development, strategy, talent acquisition, and physician network management. It serves biopharmaceutical and medical device companies, healthcare information technology companies, and healthcare providers; and other diversified companies comprising staffing and commercial real estate firms, financial institutions, and other organizations in the healthcare ecosystem. Definitive Healthcare Corp. was founded in 2011 and is headquartered in Framingham, Massachusetts.
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