Healthstream Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Healthstream (NAS: HSTM) filed its 10-K on Tuesday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Healthstream beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share grew significantly.

Gross margins contracted, operating margins expanded, and net margins expanded.

Revenue details
Healthstream reported revenue of $21.9 million. The four analysts polled by S&P Capital IQ looked for sales of $21.4 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $17.6 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.07. The four earnings estimates compiled by S&P Capital IQ forecast $0.05 per share. GAAP EPS of $0.07 for Q4 were 40% higher than the prior-year quarter's $0.05 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 61.4%, 150 basis points worse than the prior-year quarter. Operating margin was 13.6%, 450 basis points better than the prior-year quarter. Net margin was 8.2%, 140 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $23.1 million. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $99.6 million. The average EPS estimate is $0.32.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 67 members rating the stock outperform and five members rating it underperform. Among 15 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Healthstream a green thumbs-up, and one gives it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Healthstream is outperform, with an average price target of $16.50.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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