Contrasting DarioHealth (NASDAQ:DRIO) and HealthStream (NASDAQ:HSTM)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.25%	6.37%	4.37%
DarioHealth	-169.87%	-54.81%	-33.36%

Volatility and Risk

HealthStream has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, DarioHealth has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for HealthStream and DarioHealth, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	4	1	0	2.20
DarioHealth	1	1	3	0	2.40

HealthStream currently has a consensus price target of $36.00, indicating a potential upside of 25.39%. DarioHealth has a consensus price target of $9.00, indicating a potential upside of 276.57%. Given DarioHealth’s stronger consensus rating and higher possible upside, analysts plainly believe DarioHealth is more favorable than HealthStream.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$304.06 million	2.89	$18.34 million	$0.70	41.01
DarioHealth	$22.36 million	1.05	-$41.71 million	($6.13)	-0.39

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

Institutional and Insider Ownership

69.6% of HealthStream shares are held by institutional investors. Comparatively, 33.4% of DarioHealth shares are held by institutional investors. 20.4% of HealthStream shares are held by insiders. Comparatively, 3.5% of DarioHealth shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

HealthStream beats DarioHealth on 9 of the 13 factors compared between the two stocks.

About HealthStream

HealthStream, Inc. provides workforce solutions for healthcare organizations, with a focus on helping them educate, develop and manage their employees. Its offerings include online learning and training, talent and performance management, and tools for managing staff credentialing and compliance. The company’s products include the HealthStream Learning Center and solutions delivered through its hStream platform. Hospitals and other healthcare organizations use these services to support workforce education, professional development and operational processes.

About DarioHealth

DarioHealth Corp. is a digital health company that develops technology-enabled solutions for managing chronic conditions. Its platform combines connected medical devices, mobile applications, data analytics and personalized coaching to help individuals monitor and improve their health. The company’s offerings have focused on conditions including diabetes, hypertension, musculoskeletal disorders and behavioral health. Products and services may include connected blood glucose and blood pressure monitoring, digital programs for pain and mobility management, health coaching, educational content and tools that support healthier daily habits.