American Well (NYSE:AMWL – Get Free Report) and HealthStream (NASDAQ:HSTM – Get Free Report) are both small-cap healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Institutional & Insider Ownership
56.0% of American Well shares are held by institutional investors. Comparatively, 69.6% of HealthStream shares are held by institutional investors. 12.8% of American Well shares are held by insiders. Comparatively, 20.4% of HealthStream shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares American Well and HealthStream”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| American Well | $249.32 million | 0.77 | -$95.70 million | ($4.77) | -2.43 |
| HealthStream | $304.06 million | 2.76 | $18.34 million | $0.72 | 39.85 |
HealthStream has higher revenue and earnings than American Well. American Well is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
American Well has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and recommmendations for American Well and HealthStream, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| American Well | 1 | 5 | 1 | 0 | 2.00 |
| HealthStream | 0 | 3 | 0 | 0 | 2.00 |
American Well currently has a consensus price target of $9.50, suggesting a potential downside of 18.08%. HealthStream has a consensus price target of $27.00, suggesting a potential downside of 5.91%. Given HealthStream’s higher possible upside, analysts plainly believe HealthStream is more favorable than American Well.
Profitability
This table compares American Well and HealthStream’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| American Well | -35.75% | -30.12% | -22.30% |
| HealthStream | 6.60% | 6.81% | 4.64% |
Summary
HealthStream beats American Well on 11 of the 13 factors compared between the two stocks.
About American Well
American Well Corporation, an enterprise platform and software company, delivers digitally enabling hybrid care in the United States and internationally. The company offers Converge, a cloud-based platform that enables health providers, payers, and innovators to provide in-person, virtual and automated care; and delivers virtual primary care, post-discharge follow-up, chronic condition management, virtual nursing, e-sitting, on-demand and scheduled virtual visits, specialty consults, automated care, and behavioral health, as well as specialty care programs, including dermatology, musculoskeletal care, second opinion, and cardiometabolic care to patients and members. It provides Carepoint devices comprising carts, peripherals, tablets, and TVs, which serve as digital access points in clinical settings. In addition, the company offers Amwell Medical Group network services consisting of primary and urgent care, behavioral health therapy, acute psychiatry, lactation counseling, and nutrition services. Further, it provides professional services to facilitate implementation, workflow design, systems integration, and service expansion for its products, as well as patient and provider engagement services. The company sells its products through field sales professionals, channel partners, and value-added resellers. American Well Corporation was incorporated in 2006 and is headquartered in Boston, Massachusetts.
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.
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