HealthStream, Inc. (NASDAQ:HSTM) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of US$279m were in line with what the analysts predicted, HealthStream surprised by delivering a statutory profit of US$0.50 per share, a notable 14% above expectations. 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.

View our latest analysis for HealthStream

Taking into account the latest results, the current consensus from HealthStream's five analysts is for revenues of US$294.5m in 2024. This would reflect a modest 5.5% increase on its revenue over the past 12 months. Statutory per share are forecast to be US$0.51, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$296.9m and earnings per share (EPS) of US$0.48 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 5.6% to US$31.67, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic HealthStream analyst has a price target of US$36.00 per share, while the most pessimistic values it at US$27.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting HealthStream's growth to accelerate, with the forecast 5.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 11% annually. 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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 estimates - from multiple HealthStream analysts - going out to 2026, 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.