Is HealthStream, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for HealthStream, Inc. has moved from very attractive to fair, indicating a shift in its perceived value. Based on the current metrics, the company appears to be overvalued. The P/E ratio stands at 46, significantly higher than the peer average of approximately 40.95, while the EV to EBITDA ratio of 12.29 is also above the industry norm, suggesting that investors are paying a premium for earnings relative to its peers.
In comparison to its peers, Pagaya Technologies Ltd. has a much higher P/E ratio of 71.76, while Couchbase, Inc. shows a negative P/E, indicating varying levels of risk and performance within the sector. HealthStream's return performance has been mixed; while it outperformed the S&P 500 in the past week with a return of 3.67% compared to 1.70%, it has underperformed over the longer term, with a 1-year return of -8.26% against the S&P 500's 14.08%. This trend reinforces the notion that HealthStream may not be a compelling investment at its current valuation.