Is HealthStream, Inc. overvalued or undervalued?

As of 10 September 2025, the valuation grade for HealthStream, Inc. has moved from expensive to fair. The company appears fairly valued based on its current metrics. Key ratios include a P/E ratio of 46, an EV to EBITDA of 12.29, and a Price to Book Value of 2.40. In comparison, Pagaya Technologies Ltd. has a higher P/E ratio of 71.76, while Couchbase, Inc. shows a negative P/E, indicating that HealthStream is positioned more favorably among its peers.
Despite its fair valuation, HealthStream has underperformed against the S&P 500 over various periods, with a year-to-date return of -8.27% compared to the S&P 500's 12.22%. However, over a five-year horizon, the stock has returned 44.69%, which is significantly lower than the S&P 500's 96.61%, suggesting potential for improvement in future performance.