Locafy (NASDAQ:LCFY) & HealthStream (NASDAQ:HSTM) Critical Review

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

Analyst Ratings

This is a breakdown of current ratings and target prices for HealthStream and Locafy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	0	2	2	1	2.80
Locafy	0	0	0	0	0.00

HealthStream currently has a consensus price target of $31.50, suggesting a potential upside of 11.62%. Given HealthStream’s stronger consensus rating and higher possible upside, equities analysts clearly believe HealthStream is more favorable than Locafy.

Insider and Institutional Ownership

69.6% of HealthStream shares are owned by institutional investors. Comparatively, 0.0% of Locafy shares are owned by institutional investors. 20.5% of HealthStream shares are owned by company insiders. Comparatively, 28.7% of Locafy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

HealthStream has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Locafy has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Earnings and Valuation

This table compares HealthStream and Locafy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$292.37 million	2.95	$15.21 million	$0.63	44.79
Locafy	$3.85 million	1.41	-$1.96 million	($1.23)	-3.20

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.84%	5.67%	3.91%
Locafy	-58.48%	-64.65%	-36.58%

Summary

HealthStream beats Locafy on 13 of the 15 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 Locafy

Locafy Limited operates as a software-as-a-service company (SaaS) that specializes in search engine marketing in Australia, New Zealand, Europe, North America, and internationally. The company operates in three segments: Publishing, Direct Sales, and Reseller Sales. It focuses on commercializing its SaaS online publishing technology platform that comprises an integrated suite of solutions. The company also owns and operates several online directories and offers search engine optimization solutions, which include creation of proximity pages and proximity networks, local pages, and map pack booster. In addition, its platform publishes content to various devices that uses a web browser to display web content, as well as programmatically optimizes the published content for local search. The company offers its solutions directly to customers, as well as through digital agencies and search engine optimization freelancers. The company was formerly known as Moboom Limited and changed its name to Locafy Limited in January 2021. Locafy Limited was incorporated in 2009 and is based in Subiaco, Australia.