System1 (NYSE:SST – Get Free Report) and HealthStream (NASDAQ:HSTM – Get Free Report) are both small-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.
Analyst Recommendations
This is a summary of recent recommendations and price targets for System1 and HealthStream, as provided by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
System1 | 0 | 1 | 1 | 0 | 2.50 |
HealthStream | 0 | 1 | 2 | 0 | 2.67 |
System1 currently has a consensus price target of $3.50, indicating a potential upside of 133.33%. HealthStream has a consensus price target of $32.00, indicating a potential upside of 14.70%. Given System1’s higher possible upside, analysts clearly believe System1 is more favorable than HealthStream.
Dividends
Insider & Institutional Ownership
87.5% of System1 shares are owned by institutional investors. Comparatively, 69.6% of HealthStream shares are owned by institutional investors. 28.3% of System1 shares are owned by insiders. Comparatively, 20.6% of HealthStream shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares System1 and HealthStream’s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
System1 | $365.77 million | 0.37 | -$227.22 million | ($2.27) | -0.66 |
HealthStream | $279.06 million | 3.04 | $15.21 million | $0.58 | 48.10 |
HealthStream has lower revenue, but higher earnings than System1. System1 is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
System1 has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.
Profitability
This table compares System1 and HealthStream’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
System1 | -49.23% | -42.08% | -12.99% |
HealthStream | 6.30% | 5.21% | 3.56% |
Summary
HealthStream beats System1 on 9 of the 16 factors compared between the two stocks.
About System1
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.
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.
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