Definitive Healthcare (NASDAQ:DH) versus HealthStream (NASDAQ:HSTM) Head-To-Head Review

HealthStream (NASDAQ:HSTM) and Definitive Healthcare (NASDAQ:DH) are both small-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets 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 currently has a consensus price target of $27.00, suggesting a potential downside of 7.25%. Definitive Healthcare has a consensus price target of $1.47, suggesting a potential upside of 40.14%. Given Definitive Healthcare’s higher possible upside, analysts plainly believe Definitive Healthcare is more favorable than HealthStream.

Valuation and Earnings

This table compares HealthStream and Definitive Healthcare”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$321.12 million	2.65	$18.34 million	$0.72	40.43
Definitive Healthcare	$232.70 million	0.48	-$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.

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%

Volatility & Risk

HealthStream has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500. Comparatively, Definitive Healthcare has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

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.