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HealthStream, Inc. (HSTM) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of HealthStream (HSTM - Free Report) ? Shares have been on the move with the stock up 9.3% over the past month. The stock hit a new 52-week high of $31.7 in the previous session. HealthStream has gained 16.1% since the start of the year compared to the 29.4% move for the Zacks Computer and Technology sector and the 24.8% return for the Zacks Internet - Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 21, 2024, HealthStream reported EPS of $0.19 versus consensus estimate of $0.12 while it missed the consensus revenue estimate by 0.59%.
For the current fiscal year, HealthStream is expected to post earnings of $0.63 per share on $290.96 million in revenues. This represents a 26% change in EPS on a 4.26% change in revenues. For the next fiscal year, the company is expected to earn $0.64 per share on $306.45 million in revenues. This represents a year-over-year change of 2.12% and 5.32%, respectively.
Valuation Metrics
HealthStream may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
HealthStream has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 50.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 33.1X. On a trailing cash flow basis, the stock currently trades at 14X versus its peer group's average of 10.8X. Additionally, the stock has a PEG ratio of 4.17. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, HealthStream currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if HealthStream fits the bill. Thus, it seems as though HealthStream shares could have a bit more room to run in the near term.
How Does HSTM Stack Up to the Competition?
Shares of HSTM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Alphabet Inc. (GOOG - Free Report) . GOOG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Alphabet Inc. beat our consensus estimate by 15.85%, and for the current fiscal year, GOOG is expected to post earnings of $8.92 per share on revenue of $294.6 billion.
Shares of Alphabet Inc. have gained 9.4% over the past month, and currently trade at a forward P/E of 22.31X and a P/CF of 25.86X.
The Internet - Services industry is in the top 26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HSTM and GOOG, even beyond their own solid fundamental situation.
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HealthStream, Inc. (HSTM) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of HealthStream (HSTM - Free Report) ? Shares have been on the move with the stock up 9.3% over the past month. The stock hit a new 52-week high of $31.7 in the previous session. HealthStream has gained 16.1% since the start of the year compared to the 29.4% move for the Zacks Computer and Technology sector and the 24.8% return for the Zacks Internet - Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 21, 2024, HealthStream reported EPS of $0.19 versus consensus estimate of $0.12 while it missed the consensus revenue estimate by 0.59%.
For the current fiscal year, HealthStream is expected to post earnings of $0.63 per share on $290.96 million in revenues. This represents a 26% change in EPS on a 4.26% change in revenues. For the next fiscal year, the company is expected to earn $0.64 per share on $306.45 million in revenues. This represents a year-over-year change of 2.12% and 5.32%, respectively.
Valuation Metrics
HealthStream may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
HealthStream has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 50.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 33.1X. On a trailing cash flow basis, the stock currently trades at 14X versus its peer group's average of 10.8X. Additionally, the stock has a PEG ratio of 4.17. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, HealthStream currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if HealthStream fits the bill. Thus, it seems as though HealthStream shares could have a bit more room to run in the near term.
How Does HSTM Stack Up to the Competition?
Shares of HSTM have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Alphabet Inc. (GOOG - Free Report) . GOOG has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Alphabet Inc. beat our consensus estimate by 15.85%, and for the current fiscal year, GOOG is expected to post earnings of $8.92 per share on revenue of $294.6 billion.
Shares of Alphabet Inc. have gained 9.4% over the past month, and currently trade at a forward P/E of 22.31X and a P/CF of 25.86X.
The Internet - Services industry is in the top 26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HSTM and GOOG, even beyond their own solid fundamental situation.