HealthStream (NASDAQ:HSTM) versus Dropbox (NASDAQ:DBX) Financial Analysis

HealthStream (NASDAQ:HSTM) and Dropbox (NASDAQ:DBX) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Profitability

This table compares HealthStream and Dropbox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.39%	6.47%	4.44%
Dropbox	18.71%	-30.01%	17.41%

Volatility & Risk

HealthStream has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Dropbox has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for HealthStream and Dropbox, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	3	0	0	2.00
Dropbox	2	3	1	0	1.83

HealthStream currently has a consensus price target of $24.00, suggesting a potential downside of 16.43%. Dropbox has a consensus price target of $27.00, suggesting a potential downside of 8.72%. Given Dropbox’s higher probable upside, analysts clearly believe Dropbox is more favorable than HealthStream.

Institutional & Insider Ownership

69.6% of HealthStream shares are held by institutional investors. Comparatively, 94.8% of Dropbox shares are held by institutional investors. 20.4% of HealthStream shares are held by company insiders. Comparatively, 35.5% of Dropbox shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares HealthStream and Dropbox”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$311.78 million	2.69	$18.34 million	$0.67	42.87
Dropbox	$2.52 billion	2.74	$508.40 million	$1.83	16.16

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

Summary

Dropbox beats HealthStream on 11 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 Dropbox

Dropbox, Inc. provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.