Financial Review: Zoom Video Communications (NASDAQ:ZM) and HealthStream (NASDAQ:HSTM)

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for HealthStream and Zoom Video Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HealthStream 0 4 1 0 2.20
Zoom Video Communications 3 10 15 0 2.43

HealthStream presently has a consensus target price of $24.00, suggesting a potential downside of 7.21%. Zoom Video Communications has a consensus target price of $425.80, suggesting a potential upside of 38.30%. Given Zoom Video Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Zoom Video Communications is more favorable than HealthStream.

Profitability

This table compares HealthStream and Zoom Video Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HealthStream 6.86% 4.19% 2.94%
Zoom Video Communications 17.10% 27.93% 14.44%

Earnings & Valuation

This table compares HealthStream and Zoom Video Communications’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HealthStream $254.11 million 3.21 $15.77 million $0.44 58.78
Zoom Video Communications $622.66 million 145.23 $25.31 million $0.09 3,421.00

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

Institutional & Insider Ownership

72.1% of HealthStream shares are owned by institutional investors. Comparatively, 38.0% of Zoom Video Communications shares are owned by institutional investors. 20.4% of HealthStream shares are owned by insiders. Comparatively, 24.3% of Zoom Video Communications shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

HealthStream has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Zoom Video Communications has a beta of -1.46, indicating that its share price is 246% less volatile than the S&P 500.

Summary

Zoom Video Communications beats HealthStream on 11 of the 14 factors compared between the two stocks.

HealthStream Company Profile

HealthStream, Inc. provides workforce and provider solutions for healthcare organizations in the United States. It operates through two segments, Workforce Solutions and Provider Solutions. The company offers workforce solutions, including software-as-a-service (SaaS) based services and subscription-based solutions to meet the range of its clinical development, talent management, training, certification, scheduling, competency assessment, performance appraisal, and other needs, as well as implementation and account management services. It also provides applications for learning, compensation management, succession planning, competency management, disclosure management, simulation-based education, quality management, and industry training. In addition, the company offers VerityStream that delivers enterprise-class solutions to transform the healthcare provider experience for ambulatory surgery centers, urgent care facilities, clinics, medical groups, and other healthcare organizations; EchoCredentialing and MSOW platforms that manage medical staff credentialing, enrollment, and privileging processes for hospitals; and EchoOneApp, a provider enrollment platform for medical groups. Further, it provides CredentialMyDoc, a credentialing and enrollment SaaS solution for medical groups and surgery centers; CredentialStream, a SaaS-based provider credentialing, privileging, and enrollment solution; and NurseGrid Mobile for nurse managers. The company offers its solutions in healthcare industry companies that include private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through direct sales teams. HealthStream, Inc. was incorporated in 1990 and is headquartered in Nashville, Tennessee.

Zoom Video Communications Company Profile

Zoom Video Communications, Inc. provides a video-first communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system that provides secure call routing, call queuing, call detail reports, call recording, call quality monitoring, voicemail, switch to video, and other services, as well as inbound and outbound calling services; and Zoom Chat enables to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices for meeting and phone customers. It also provides Zoom Rooms, a software-based conference room system; Zoom Conference Room Connector, a gateway for SIP/H.323 endpoints to join Zoom meetings; Zoom Video Webinars to provide video presentations to large audiences from many devices; and Zoom Hardware-as-a-Service allows users to access video communication technology with subscription options for phone and meeting room hardware. The company offers Zoom for Developers to integrate its video, phone, chat, and content sharing into other applications, as well as manages Zoom accounts; Zoom App Marketplace enhance developers to publish their apps; OnZoom, a platform for users to create, host, and monetize online events; and Zoom Apps to access from Zoom Meetings and the Zoom Desktop client to facilitate collaboration and engagement during meetings. It serves individuals; and education, entertainment/media, enterprise infrastructure, finance, government, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was incorporated in 2011 and is headquartered in San Jose, California.

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