Financial Analysis: Taboola.com (NASDAQ:TBLA) vs. HealthStream (NASDAQ:HSTM)

HealthStream (NASDAQ:HSTM) and Taboola.com (NASDAQ:TBLA) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares HealthStream and Taboola.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.84%	5.67%	3.91%
Taboola.com	-1.96%	-1.68%	-1.04%

Volatility and Risk

HealthStream has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, Taboola.com has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Institutional and Insider Ownership

69.6% of HealthStream shares are owned by institutional investors. Comparatively, 42.9% of Taboola.com shares are owned by institutional investors. 20.6% of HealthStream shares are owned by company insiders. Comparatively, 22.4% of Taboola.com shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for HealthStream and Taboola.com, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	2	2	1	2.80
Taboola.com	0	0	4	0	3.00

HealthStream presently has a consensus target price of $31.50, suggesting a potential upside of 0.61%. Taboola.com has a consensus target price of $5.31, suggesting a potential upside of 69.73%. Given Taboola.com’s stronger consensus rating and higher possible upside, analysts clearly believe Taboola.com is more favorable than HealthStream.

Valuation and Earnings

This table compares HealthStream and Taboola.com”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$279.06 million	3.41	$15.21 million	$0.65	48.17
Taboola.com	$1.44 billion	0.63	-$82.04 million	($0.10)	-31.30

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

Summary

HealthStream beats Taboola.com on 9 of the 15 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 Taboola.com

Taboola.com Ltd., together with its subsidiaries, operates an artificial intelligence-based algorithmic engine platform in Israel, the United States, the United Kingdom, Germany, and internationally. It offers Taboola, a platform that partners with websites, devices, and mobile apps to recommend editorial content and advertisements on the open web to users. The company was incorporated in 2006 and is headquartered in New York, New York.