Financial Analysis: Akamai Technologies (NASDAQ:AKAM) and HealthStream (NASDAQ:HSTM)

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for HealthStream and Akamai Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	1	2	0	0	1.67
Akamai Technologies	3	7	12	0	2.41

HealthStream presently has a consensus target price of $24.00, suggesting a potential downside of 3.88%. Akamai Technologies has a consensus target price of $145.29, suggesting a potential downside of 2.84%. Given Akamai Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Akamai Technologies is more favorable than HealthStream.

Profitability

This table compares HealthStream and Akamai Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.39%	6.47%	4.44%
Akamai Technologies	10.20%	12.96%	5.56%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$304.06 million	2.40	$18.34 million	$0.67	37.27
Akamai Technologies	$4.21 billion	5.17	$452.03 million	$2.97	50.35

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

Risk & Volatility

HealthStream has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Akamai Technologies has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Institutional and Insider Ownership

69.6% of HealthStream shares are held by institutional investors. Comparatively, 94.3% of Akamai Technologies shares are held by institutional investors. 20.4% of HealthStream shares are held by insiders. Comparatively, 2.3% of Akamai Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Akamai Technologies beats HealthStream on 13 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 Akamai Technologies

Akamai Technologies, Inc. provides cloud computing, security, and content delivery services in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and cloud computing services, such as compute, storage, networking, database, and container management services to build, deploy, and secure applications and workloads. In addition, the company offers content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.