Noble Financial Downgrades HealthStream (HSTM) to Hold; Valuation Speaks Loudly

Noble Financial downgraded HealthStream (NASDAQ: HSTM) from Buy to Hold.

Noble analyst said, "Despite strong fundamentals, we are reducing our rating on company shares from Buy to Hold solely due to valuation considerations...At current prices the shares are trading at an enterprise-value to EBITDA multiple (on 2012 forecasts) of 14.2x versus the peer group average of 12.3x...While the current 15% premium for company shares appears justified given relatively strong EPS growth prospects, a greater premium appears excessive...We expect both of the company's divisions to generate strong growth in 2011 as the businesses benefit from recent investments."

For more ratings news on HealthStream click here and for the rating history of HealthStream click here.

Shares of HealthStream closed at $12.17 yesterday.

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