Critical Analysis: HealthStream (NASDAQ:HSTM) versus Health In Tech (NASDAQ:HIT)

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

Insider & Institutional Ownership

69.6% of HealthStream shares are held by institutional investors. 71.0% of Health In Tech shares are held by company insiders. Comparatively, 20.4% of HealthStream shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Health In Tech and HealthStream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Health In Tech	N/A	N/A	N/A
HealthStream	6.25%	6.37%	4.37%

Risk and Volatility

Health In Tech has a beta of 3.02, suggesting that its share price is 202% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Health In Tech and HealthStream, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Health In Tech	1	0	1	1	2.67
HealthStream	0	4	1	0	2.20

Health In Tech currently has a consensus target price of $3.50, suggesting a potential upside of 479.47%. HealthStream has a consensus target price of $36.00, suggesting a potential upside of 25.68%. Given Health In Tech’s stronger consensus rating and higher probable upside, research analysts plainly believe Health In Tech is more favorable than HealthStream.

Earnings and Valuation

This table compares Health In Tech and HealthStream”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Health In Tech	$32.83 million	1.21	-$4.59 million	($0.07)	-8.63
HealthStream	$304.06 million	2.75	$18.34 million	$0.70	40.92

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

Summary

HealthStream beats Health In Tech on 9 of the 14 factors compared between the two stocks.

About Health In Tech

Health In Tech, Inc. is a U.S.-based insurance technology company that provides a digital platform for the self-funded health benefits market. Its technology is designed to connect employers, insurance brokers, third-party administrators and stop-loss carriers through a streamlined process for evaluating and administering health benefit plans. The company’s platform supports functions including plan quoting, comparison and enrollment, with the goal of simplifying interactions among participants in the employer-sponsored health insurance ecosystem.

About HealthStream

HealthStream, Inc. provides workforce and provider solutions designed for healthcare organizations. Its software and services help hospitals, health systems, medical practices and other healthcare providers manage employee education, training, credentialing, compliance and professional development. The company’s offerings include learning management and education tools, competency and performance-management solutions, and systems for managing provider credentials, privileging and enrollment. HealthStream also provides workforce, talent-management and patient-experience solutions that support healthcare organizations in improving staff engagement, operational processes and the quality of care.