Financial Review: HealthStream (NASDAQ:HSTM) vs. IAC (NASDAQ:IAC)

HealthStream (NASDAQ:HSTM – Get Rating) and IAC (NASDAQ:IAC – Get Rating) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HealthStream	4.53%	3.04%	2.06%
IAC	-22.35%	-4.52%	-2.83%

Analyst Ratings

This is a summary of current ratings and recommmendations for HealthStream and IAC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	1	0	0	2.00
IAC	0	1	11	0	2.92

HealthStream presently has a consensus price target of $24.50, suggesting a potential downside of 2.16%. IAC has a consensus price target of $88.13, suggesting a potential upside of 79.77%. Given IAC’s stronger consensus rating and higher probable upside, analysts clearly believe IAC is more favorable than HealthStream.

Earnings and Valuation

This table compares HealthStream and IAC’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$266.83 million	2.87	$12.09 million	$0.39	64.21
IAC	$5.24 billion	0.78	-$1.17 billion	($13.50)	-3.63

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

Institutional & Insider Ownership

70.5% of HealthStream shares are owned by institutional investors. Comparatively, 89.1% of IAC shares are owned by institutional investors. 21.2% of HealthStream shares are owned by company insiders. Comparatively, 13.3% of IAC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

HealthStream has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, IAC has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Summary

HealthStream beats IAC on 8 of the 14 factors compared between the two stocks.

About HealthStream

(Get Rating)

HealthStream, Inc. engages in the provision of services to healthcare organizations. It operates through the following segments: Workforce Solutions and Provider Solutions. The Workforce Solutions segment offers training, certification, assessment, development, and scheduling needs of the healthcare workforce. The Provider Solutions delivers software applications for administering and tracking provider credentialing, privileging, call center, and enrollment activities. The company was founded by Robert A. Frist, Jr. and Jeffery L. McLaren in 1990 and is headquartered in Nashville, TN.

About IAC

(Get Rating)

IAC is a media and Internet company comprised of some of the world’s most recognized brands and products, such as HomeAdvisor, Vimeo, About.com, Dictionary.com, The Daily Beast, Investopedia, and Match Group’s online dating portfolio, which includes Match, OkCupid and Tinder. Ranked by Fortune magazine’s annual standing of the world’s most admired companies in the Internet Services & Retailing sector for many years, IAC’s family of websites is one of the largest in the world, with over two billion monthly visits reaching users in more than 190 countries. The company is headquartered in the Chelsea neighborhood of New York City and has business operations and satellite offices around the world. In December 2004, Expedia split from IAC as a separate publicly traded company. In December 2011, TripAdvisor spun out from Expedia. In August 2008, IAC split into five separate publicly traded companies. The four spun-off companies were HSN, Ticketmaster, Interval Leisure Group, and Tree.com. IAC’s notable acquisitions include: – 2012: [The About Group](http://www.crunchbase.com/organization/about-com) – 2011: [OkCupid](http://www.crunchbase.com/organization/okcupid) – 2011: [Meetic](htt