Analyzing Teladoc Health (NYSE:TDOC) and HealthStream (NASDAQ:HSTM)

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Teladoc Health	$2.53 billion	0.41	-$200.32 million	($0.99)	-5.80
HealthStream	$304.06 million	2.86	$18.34 million	$0.72	41.31

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

Insider and Institutional Ownership

76.8% of Teladoc Health shares are held by institutional investors. Comparatively, 69.6% of HealthStream shares are held by institutional investors. 0.7% of Teladoc Health shares are held by company insiders. Comparatively, 20.4% of HealthStream shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Teladoc Health	1	10	5	0	2.25
HealthStream	0	3	0	0	2.00

Teladoc Health presently has a consensus price target of $7.54, indicating a potential upside of 31.17%. HealthStream has a consensus price target of $27.00, indicating a potential downside of 9.21%. Given Teladoc Health’s stronger consensus rating and higher probable upside, research analysts clearly believe Teladoc Health is more favorable than HealthStream.

Volatility & Risk

Teladoc Health has a beta of 2.12, suggesting that its stock price is 112% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Teladoc Health	-7.13%	-12.15%	-5.83%
HealthStream	6.60%	6.81%	4.64%

Summary

HealthStream beats Teladoc Health on 8 of the 14 factors compared between the two stocks.

About Teladoc Health

Teladoc Health, Inc. provides virtual healthcare services worldwide. The company operates through Teladoc Health Integrated Care and BetterHelp segments. The Integrated Care segment offers virtual medical services, including general medical, expert medical, specialty medical, chronic condition management, and mental health, as well as enabling technologies and enterprise telehealth solutions for hospitals and health systems. The BetterHelp segment operates a mental health platform that provides online counseling and therapy services through website, mobile applications, phones, and text-based interactions by its licensed clinicians. The company offers its products and services under the Teladoc, Livongo, and BetterHelp brands. It serves employers, health plans, hospitals and health systems, and insurance and financial services companies, as well as individual members. The company was formerly known as Teladoc, Inc. and changed its name to Teladoc Health, Inc. in August 2018. Teladoc Health, Inc. was incorporated in 2002 and is headquartered in Purchase, New York.

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.