HSTM vs. ZS: Which Stock Is the Better Value Option?

Core Viewpoint - HealthStream (HSTM) is currently viewed as a better value opportunity compared to Zscaler (ZS) based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Outlook - HealthStream has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Zscaler, which has a Zacks Rank of 3 (Hold) [3]. - The improvement in earnings outlook for HSTM is noted to be stronger than that of ZS [3]. Group 2: Valuation Metrics - HSTM has a forward P/E ratio of 49.54, while ZS has a higher forward P/E of 55.91 [5]. - The PEG ratio for HSTM is 4.13, compared to ZS's PEG ratio of 7.30, indicating HSTM's expected earnings growth is more favorable [5]. - HSTM's P/B ratio stands at 2.43, significantly lower than ZS's P/B ratio of 22.17, suggesting HSTM is more aligned with its book value [6]. Group 3: Value Grades - Based on the analysis of various valuation metrics, HSTM holds a Value grade of B, while ZS has a Value grade of D, reinforcing HSTM's position as the superior value option [6].