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.
Coming off a year when HealthStream grew its top line by more than a quarter and operating income rose 19 percent, the company's board of directors has awarded 5 percent raises to its top executives. As detailed in HealthStream's proxy statement filed this week, President and CEO Bobby Frist will be paid a 2013 base salary of almost $270,000 while his top lieutenants all will get between $202,000 and $256,000.
Shares of HealthStream (Ticker: HSTM) closed Thursday at $22.27 and have fallen about 8 percent year to date.
As part of his team's fourth-quarter earnings report this week, HealthStream CEO Bobby Frist also announced the company's move into the long-term care and home health provider markets as well as other post-acute segments. On the company's conference call with analysts Wednesday, Frist offered up some more details. Here are some of them; for the full transcript of the call, click here.
• HealthStream already has some clients in this space and is reorganizing its internal reporting to better group them. It's also hiring a number of salespeople — its total sales force grew to 76 from 61 last year and should add another 10 people in the coming months — to focus on post-acute prospects. However, Frist said meaningful new revenue streams from the push won't show up until late this year.
• Look for news of content and technology partnerships this spring as HealthStream builds out its offerings to the post-acute market, which executives say has a workforce of about 3 million. Costs won't ramp up quickly, Frist said, but will likely peak late in the third quarter as hiring picks up.
• Pricing and margins could become interesting. Frist said HealthStream's research shows a number of playes in the post-acute talent management space have price points that are higher than in the acute-care arena. So HealthStream has a chance to sell its products for more than it's charging for its main business now but still be a relative bargain in the post-acute market.
• As has been the case with HealthStream's existing businesses, acquisitions or joint ventures are on the table when it comes to building out oferings.
"It might be supplemental over time. We’ll take our time and process those opportunities, but I would not exclude opportunities in that space just because we’ve launched an organic strategy," Frist said. "We might find really good compliments on how to help that vertical grow as well."
Shares of HealthStream (Ticker: HSTM) are up about 1 percent to about $21.40 in early Thursday action. They're off about 12 percent so far this year.
In an arrangement not common to the local health care industry, HealthStream (Ticker: HSTM) has signed a deal — financials for which were not disclosed — with Boxwood Technology, a Maryland-based online career services company.
The contractual arrangement calls for Boxwood to promote HealthStream’s talent management and related services to Boxwood's nearly 300 National Healthcare Career Network association clients.
“Our NHCN partners now have the opportunity to expand sales of their courseware through HealthStream’s nationwide distribution network of healthcare organizations and offer HealthStream’s learning programs to their members via their own Web sites,” John Bell, Boxwood CEO, said in a company statement.
Boxwood Technology will integrate its association–focused platform with the career centers of its health care associations, specifically those for the benefit of nurses, allied health professionals, physicians, surgeons and others.
HealthStream has come to an agreement with Dallas-based Assess Systems to offer that entity’s behavior-based, non-clinical assessment product to HealthStream’s client companies.
HealthStream (Ticker: HSTM) will use Assess’ Select for Healthcare and Assess for Healthcare to add to its services that help client companies make better hiring, placement and promotion decisions for their workforce.
"Our assessments are scientifically based, valid measurement tools that have been used with proven effectiveness in the healthcare industry where an organization's people make a defining difference in business outcomes," said