Certara, Inc. (CERT) vs HealthStream, Inc. (HSTM)

Certara, Inc. and HealthStream, Inc. are both Health Information Services companies. Certara, Inc. is the larger, with a market value of $1.4B against $883.3M — 1.5× the size. Certara, Inc. has negative trailing earnings, so its P/E is not meaningful; HealthStream, Inc. trades at 40.5×. HealthStream, Inc. grew revenue faster over the last twelve months: 8.78% against 6.89%. HealthStream, Inc. has the higher net margin (6.60% vs −16.3%) and the higher return on invested capital (5.56% vs 0.07%). Across the 21 metrics below, HealthStream, Inc. leads on 17 and Certara, Inc. on 4.

Valuation

Metric CERT HSTM Health Information Services median
P/E n/m 40.46 39.52
P/S 3.34 2.65 2.65
P/B 1.45 2.39 2.32
Price to free cash flow 25.77 12.19 16.77
EV/EBITDA 19.41 9.62 12.35
EV/Sales 3.60 2.51 3.06
Earnings yield (4.94%) 2.47% (1.68%)
Free cash flow yield 3.88% 8.21% 0.54%

Profitability

Metric CERT HSTM Health Information Services median
Gross margin 61.48% 65.08% 63.38%
Operating margin 0.29% 8.04% (8.35%)
Net margin (16.26%) 6.60% (14.70%)
Free cash flow margin 12.97% 21.76% 0.58%
Return on equity (6.72%) 6.00% (6.82%)
Return on assets (4.65%) 4.15% (6.02%)
Return on invested capital 0.07% 5.56% 0.00%

Growth

Metric CERT HSTM Health Information Services median
Revenue growth (TTM) 6.89% 8.78% 8.62%
EPS growth (last fiscal year) 87.50% (7.58%) —
Revenue growth, 5-year CAGR 11.45% 4.43% 12.36%
Net income growth, 5-year CAGR 0.00% 5.41% 0.00%

Health

Metric CERT HSTM Health Information Services median
Debt to equity 0.30 0.00 0.01
Current ratio 2.55 1.06 2.37
Net debt to EBITDA 1.07 (0.75) 0.50

Dividend

Metric CERT HSTM Health Information Services median
Dividend yield — 0.19% 0.85%
Payout ratio 0.00 0.12 0.00

Size

Metric CERT HSTM Health Information Services median
Market cap 1.36b 883.30m 352.86m

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