HealthStream Reports Quarterly Beat and Updates FY2021 Outlook

HealthStream (HSTM) delivered better-than-expected third-quarter results and also raised its FY2021 guidance. HealthStream is a leading provider of workforce solutions to healthcare organizations and other members within the healthcare industry.

The company reported adjusted earnings of $0.05 per share, beating analysts’ expectations of a loss of $0.01 per share. The company reported earnings of $0.08 per share in the prior-year period.

Revenues jumped 5% year-over-year to $64.1 million and exceeded consensus estimates of $62.89 million. The increase in revenues reflected a surge in Workforce Solutions segment revenues, which increased 4% to $51.2 million, and Provider Solutions revenues, which grew 10% to $12.9 million.

On top of this, adjusted EBITDA improved 12% year-over-year to $12.5 million during the quarter. (See HealthStream stock charts on TipRanks)

Based on the robust Q3 results, management updated its financial guidance for FY2021. Revenues are now forecast to be in the range of $255 – 257.5 million, versus the consensus estimate of $255 million. Further, the company predicts adjusted EBITDA in the range of $51 to $53 million.

Sharing his views on the results, CEO Robert A. Frist, Jr., commented, “This meaningful growth was achieved through the progress made in sales and implementations of product suites like the American Red Cross, CredentialStream, and Jane, along with our newly acquired scheduling businesses. We are excited to finish 2021 and start 2022 with this innovative, growing portfolio of applications and solutions.”

Ahead of the earnings release, Barrington analyst Vincent Colicchio reiterated a Hold rating on the stock.

Overall, the stock has a Hold consensus rating based on 1 Buy and 3 Holds. The average HealthStream price target of $31 implies 8.6% upside potential from current levels. Shares of HSTM have jumped 36% over the past year.

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