Richard Close at Avondale Partners has upgraded shares of HealthStream to 'market outperform' from 'market perform,' saying the health care education and talent management company can continue to grow on a number of fronts, including by cross-selling its products. "We have an upward bias to our forecasts going forward as the company continues to execute on multiple growth levers as illustrated in April with 1Q results," said Close, whose new price target of $31 (from $25) is above HealthStream record high set last fall. Close's call lifted HealthStream almost 5 percent to $25.69 Monday. The stock (Ticker: HSTM) is now up slightly on the year.
Just down the hall, Mark Montagna also is upbeat about the prospects for shares of shoe and hat retailer Genesco. Positive signals from rival Shoe Carnival, especially in canvas and fabric shoes, are "likely a solid read" to Genesco's performance, Montagna says. Although he sees fiscal Q1 being a bit of a bummer, Montagna expects consumers to now be making up for lost February and March sales. He has raised his price/earnings ratio target to 13 from 12, which in turn has lifted his price target for Genesco shares (Ticker: GCO) to $70 from $66. Genesco rose 1.7 percent Monday to close at $69 and change. The stock is up 26 percent year to date.
Whit Mayo at Robert W. Baird has upgraded Community Health Systems shares from 'neutral' to 'outperform' and hiked his price target for the Franklin-based company to $56 from $48. The move comes after CHS (Ticker: CYH) has given up about 10 percent this month.
At Avondale Partners, Richard Close isn't quite ready to make the same move on HealthStream shares. Following up on the company's Q1 earnings report — which were highlighted by better-than-expected revenues — Close told clients Tuesday he is sticking with his 'market perform' rating and $25 target, which is only just above where the stock (Ticker HSTM) now trades. He likes the company's growth story and its prospects in the coming quarters, but the timing just isn't quite right. "Considering we believe that HSTM can continue this level of growth in the near term, we would use a pullback to re-evaluate our rating on the stock," he wrote.
Dollar General took a bit of a dive this morning after Cleveland Research analyst Jeff Stinson said the retailer's sales growth moderated in June after a strong May. After initially losing some 5 percent of their value, the company shares (Ticker: DG) recovered a bit and were down about 3 percent at just below $51 in mid-morning action. Stinson's note came a day after FBR Capital Markets analyst Dutch Fox hiked his price target for Dollar General to $61 from $53.
Richard Close at Avondale Partners has raised his price target on HealthStream to $25 from $22. Shares of the Nashville-based health education provider (Ticker: HSTM) soared 14 percent Tuesday after the company reported strong top-line growth. That type of performance, Close wrote this morning, appears to be growing in importance for investors: "We believe there remains revenue upside potential in 2H12 although EPS upside may be limited due to investments in growth that management continues to stress. Given that investors are searching for growth, HSTM shares may continue to perform well."
So the late-day recovery in HealthStream Tuesday ended up being a head fake. Shares of the health education services provider are giving up almost 9 percent on Wednesday after investors pushed them about 6 percent post-earnings Tuesday. Avondale Partners analyst Richard Close says that's healthy even though the company's fundamentals remain on track. Close has reiterated his 'market perform' and $22 price target.
While we view HSTM's market position favorably, shares appear fully valued at 5.9x our increased revenue estimate of $101.1mm, roughly a 21% discount to the cloud-based peer group.
Bank of America analyst Vincent Sinisi has done his Q1 channel checks and says the numbers look good for Tractor Supply. The warmer weather looks to have boosted sales, leading Sinisi to lift his earnings estimates and price target — at $103, his is now the highest on the Street. Tractor Supply shares (Ticker: TSCO) have climbed 32 percent year to date and 45 percent in the past 12 months.
Another local high-flying stock may face a little headwind following regulators' decision to delay the implementation of a new diagnostic coding system. Richard Close at Avondale Partners says the proposal to push back the deadline for ICD-10 by a year to October 2014 takes away a near-term growth driver for HealthStream and a few other health IT companies. But, he adds, "a 1-year delay will not meaningfully impact providers schedules for the most part; however, this delay definitely takes some of the urgency out of the equation." HealthStream (Ticker: HSTM) has run up about 30 percent in 2012.
HealthStream looks like it will be picking up some new subscribers to its online training services in the world of University of Alabama-Birmingham, says Avondale Partners analyst Richard Close. University officials recently said they will rebrand the HealthStream platform their Health Services Foundation began using in 2003 and take it systemwide.
Another advantage of the new learning management system will be the ability to self-register for elective learning courses, in addition to regulatory courses, from a single sign-on access point. Now, if a physician needs to take courses for research-related purposes and regulatory courses to meet state or federal requirements, he or she doesn’t have to go to several different locations. Individuals can search for the course they need and register for it on the new Faculty and Staff Learning System site.
Avondale Partners analyst Richard Close sees very good things ahead for HealthStream following the health education provider's $55 million stock offering. He has raised his price target for HealthStream shares (Ticker: HSTM) to $20 from $17.50 and says revenues — especially patient surveys — and earnings could surprise to the upside in 2012. That should help the stock, which closed Tuesday trading at $16.16, reach valuations similar to those of other health care IT and technology learning names.
Frank Sparacino at First Analysis isn't quite so bullish, though: He has lowered his rating to 'equal weight' from 'overweight' and is sticking to his $16 price target.