HSTM
HealthStream, Inc.
$23.81
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 78.2% above fair value
You pay
$23.81
Bear
$10.70
Fair
$13.37
Bull
$16.03
Bear
$10.70
-55.1%
$0.79 × 10x P/E
Fair
$13.37
-43.9%
$0.79 × 12x P/E
Bull
$16.03
-32.7%
$0.79 × 15x P/E
Key Value Driver
Normalized P/E multiple (12x base case)
Implied Market Multiple
30.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $24.00 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $13.37 per share.
Warnings
Wall Street's average price target is $24.00 (from 16 analysts). Our estimate is 59% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples