Comparing HealthStream (NASDAQ:HSTM) & Sunlands Technology Group (NYSE:STG)

HealthStream (NASDAQ:HSTM) and Sunlands Technology Group (NYSE:STG) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Profitability

This table compares HealthStream and Sunlands Technology Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.39%	6.47%	4.44%
Sunlands Technology Group	18.56%	39.98%	17.58%

Insider and Institutional Ownership

69.6% of HealthStream shares are owned by institutional investors. Comparatively, 26.4% of Sunlands Technology Group shares are owned by institutional investors. 20.4% of HealthStream shares are owned by insiders. Comparatively, 59.7% of Sunlands Technology Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for HealthStream and Sunlands Technology Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	3	0	0	2.00
Sunlands Technology Group	1	0	0	0	1.00

HealthStream presently has a consensus price target of $27.00, suggesting a potential downside of 3.02%. Given HealthStream’s stronger consensus rating and higher possible upside, equities research analysts plainly believe HealthStream is more favorable than Sunlands Technology Group.

Valuation and Earnings

This table compares HealthStream and Sunlands Technology Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$304.06 million	2.68	$18.34 million	$0.67	41.55
Sunlands Technology Group	$288.84 million	0.17	$52.28 million	$3.86	0.93

Sunlands Technology Group has lower revenue, but higher earnings than HealthStream. Sunlands Technology Group is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

HealthStream has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Sunlands Technology Group has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Summary

Sunlands Technology Group beats HealthStream on 7 of the 13 factors compared between the two stocks.

About HealthStream

HealthStream, Inc. provides Software-as-a-Service (SaaS) based applications for healthcare organizations in the United States. The company’s solutions help healthcare organizations in meeting their ongoing clinical development, talent management, training, education, assessment, competency management, safety and compliance, and scheduling, as well as provider credentialing, privileging, and enrollment needs. It offers hStream, a technology platform that powers a range of healthcare workforce solutions. The company provides its solutions to customers across a range of entities within the healthcare industry, including private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through its direct sales teams. The company was incorporated in 1990 and is headquartered in Nashville, Tennessee.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.