HealthStream (NASDAQ:HSTM) and Taboola.com (NASDAQ:TBLA) Critical Contrast

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

Institutional & Insider Ownership

42.9% of Taboola.com shares are held by institutional investors. Comparatively, 69.6% of HealthStream shares are held by institutional investors. 22.4% of Taboola.com shares are held by company insiders. Comparatively, 20.6% of HealthStream shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

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

Profitability

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

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Taboola.com	$1.44 billion	0.65	-$82.04 million	($0.10)	-32.00
HealthStream	$279.06 million	3.49	$15.21 million	$0.65	49.28

HealthStream has lower revenue, but higher earnings 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.

Analyst Recommendations

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

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

Taboola.com currently has a consensus target price of $5.31, suggesting a potential upside of 66.02%. HealthStream has a consensus target price of $31.50, suggesting a potential downside of 1.65%. Given Taboola.com’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Taboola.com is more favorable than HealthStream.

Summary

HealthStream beats Taboola.com on 9 of the 15 factors compared between the two stocks.

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.

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.