HealthStream, Inc. Just Beat EPS By 5.1%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that HealthStream, Inc. (NASDAQ:HSTM) filed its yearly result this time last week. The early response was not positive, with shares down 3.3% to US$32.68 in the past week. The result was positive overall - although revenues of US$292m were in line with what the analysts predicted, HealthStream surprised by delivering a statutory profit of US$0.66 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on HealthStream after the latest results.

See our latest analysis for HealthStream

Taking into account the latest results, the current consensus from HealthStream's six analysts is for revenues of US$305.2m in 2025. This would reflect a modest 4.6% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$0.67, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$305.9m and earnings per share (EPS) of US$0.65 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 7.7% to US$35.00, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on HealthStream, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$30.00 per share. This is a very narrow spread of estimates, implying either that HealthStream is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that HealthStream's rate of growth is expected to accelerate meaningfully, with the forecast 4.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. So it's clear that despite the acceleration in growth, HealthStream is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards HealthStream following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on HealthStream. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for HealthStream going out to 2027, and you can see them free on our platform here..

You can also see our analysis of HealthStream's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.