HealthStream, Inc. (NASDAQ:HSTM) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to US$32.68 in the week after its latest full-year results. The result was positive overall - although revenues of US$292m were in line with what the analysts predicted, HealthStream surprised by delivering a statutory profit of US$0.66 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for HealthStream

Taking into account the latest results, the current consensus from HealthStream's six analysts is for revenues of US$305.2m in 2025. This would reflect a reasonable 4.6% increase on its revenue over the past 12 months. Statutory per share are forecast to be US$0.67, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$305.9m and earnings per share (EPS) of US$0.65 in 2025. So the consensus seems to have become somewhat more optimistic on HealthStream's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.7% to US$35.00. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on HealthStream, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$30.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that HealthStream's rate of growth is expected to accelerate meaningfully, with the forecast 4.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, HealthStream is expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around HealthStream's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that HealthStream's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on HealthStream. Long-term earnings power is much more important than next year's profits. We have forecasts for HealthStream going out to 2027, and you can see them free on our platform here.

We also provide an overview of the HealthStream Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.