Analyzing HealthStream (NASDAQ:HSTM) and Sound Group (NASDAQ:SOGP)

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

Analyst Ratings

This is a summary of recent ratings and price targets for HealthStream and Sound Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	1	2	0	2.67
Sound Group	0	0	0	0	N/A

HealthStream currently has a consensus target price of $32.00, indicating a potential upside of 14.70%. Given HealthStream’s higher probable upside, equities research analysts plainly believe HealthStream is more favorable than Sound Group.

Insider and Institutional Ownership

69.6% of HealthStream shares are owned by institutional investors. Comparatively, 1.6% of Sound Group shares are owned by institutional investors. 20.6% of HealthStream shares are owned by company insiders. Comparatively, 25.2% of Sound Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.30%	5.21%	3.56%
Sound Group	1.69%	8.71%	4.96%

Volatility & Risk

HealthStream has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Sound Group has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500.

Valuation & Earnings

This table compares HealthStream and Sound Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$279.06 million	3.04	$15.21 million	$0.58	48.10
Sound Group	$316.83 million	0.03	$12.54 million	$0.99	2.09

HealthStream has higher earnings, but lower revenue than Sound Group. Sound Group 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 Sound Group on 7 of the 13 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 Sound Group

Sound Group Inc. operates as an audio-centric social and entertainment company. It focuses on building audio platform to connect and communicate. The company, through its product portfolio and in-house technologies, caters to user interest in audio entertainment and social networking. The company was formerly known as LIZHI INC. and changed its name to Sound Group Inc. in January 2024. Sound Group Inc. was founded in 2010 and is based in Singapore.