Financial Comparison: Surgical Care Affiliates (SCAI) vs. HealthStream (NASDAQ:HSTM)

HealthStream (NASDAQ: HSTM) and Surgical Care Affiliates (NASDAQ:SCAI) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for HealthStream and Surgical Care Affiliates, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HealthStream 0 3 3 0 2.50
Surgical Care Affiliates 0 2 0 0 2.00

HealthStream currently has a consensus target price of $26.00, suggesting a potential upside of 13.49%. Surgical Care Affiliates has a consensus target price of $50.00, suggesting a potential downside of 10.51%. Given HealthStream’s stronger consensus rating and higher possible upside, research analysts plainly believe HealthStream is more favorable than Surgical Care Affiliates.

Earnings and Valuation

This table compares HealthStream and Surgical Care Affiliates’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HealthStream $238.45 million 3.06 $23.61 million $0.14 163.64
Surgical Care Affiliates N/A N/A N/A $0.55 101.58

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

Volatility and Risk

HealthStream has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Surgical Care Affiliates has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Profitability

This table compares HealthStream and Surgical Care Affiliates’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HealthStream 1.85% 2.27% 1.65%
Surgical Care Affiliates 21.52% 13.07% 12.83%

Insider and Institutional Ownership

76.8% of HealthStream shares are owned by institutional investors. 21.1% of HealthStream shares are owned by company insiders. Comparatively, 3.3% of Surgical Care Affiliates shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

HealthStream beats Surgical Care Affiliates on 7 of the 11 factors compared between the two stocks.

About HealthStream

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

About Surgical Care Affiliates

Surgical Care Affiliates, Inc. is a provider of solutions to physicians, health plans and health systems to optimize surgical care. The Company offers tools and systems in the areas of clinical benchmarking, clinical best practices, operating efficiency, care coordination and supply chain management. As of December 31, 2016, the Company operated a network of surgical facilities in the United States, which included 197 ambulatory surgery centers (ASCs) and seven surgical hospitals in partnership with approximately 3,000 physician partners. The Company’s operations consist of its ownership and management of ASCs and surgical hospitals. Its ASCs provide the facilities, equipment, supplies and clinical support staff necessary to provide non-emergency surgical services to patients not requiring hospitalization. Its surgical hospitals allow physicians to perform a range of surgical procedures, including surgeries, and allow patients to stay in the hospital for several nights to recover.

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