Healthcare Services (HCSG) AI Stock Analysis

• Market Cap: $1.06B
• Dividend Yield: N/A
• Average Volume (3M): 629.60K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.89
• Revenue Growth: 3.71%
• EPS Growth: 1.32%
• Country: US
• Employees: 35,300
• Sector: Healthcare
• Sector Strength: 41
• Industry: Medical - Care Facilities
• EPS (TTM): 0.23
• Shares Outstanding: 72,918,630
• 10 Day Avg. Volume: 597,937
• 30 Day Avg. Volume: 629,595
• PEG Ratio: -1.06
• Price to Book (P/B): 2.09
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -66.68
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 0.11
• Enterprise Value/Gross Profit: 2.85
• Enterprise Value/Ebitda: 2.46
• 1Y Price Target: $15.00
• Price Target Upside: 1.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 73 Outperform
• Price Target: ―

Healthcare Services Group, Inc. exhibits strong financial health and operational efficiency, bolstered by positive earnings call highlights such as record revenue and increased cash flow guidance. However, the stock's valuation appears relatively high, and technical indicators suggest caution due to overbought conditions. While the company is well-positioned for growth, investors should be mindful of potential market corrections following recent price increases.

Positive Factors

Earnings

HCSG's first quarter results exceeded expectations in revenues, EPS, and adjusted EBITDA, marking its best performance in five years.

Industry Trends

HCSG is expected to benefit from an improving nursing home industry, strong retention, new customer adds, and cross-selling opportunities.

Valuation

The current valuation of HCSG shares offers an attractive entry point, as it is below the five-year average.

Negative Factors

Client Challenges

Client industry challenges have affected collections and margins.

Financial Distress

Financial distress related to a number of clients have affected revenue collection.

Growth Prospects

HCSG's tepid growth prospect and elevated payment cycle limit multiple expansion despite improving business conditions.

Healthcare Services Business Overview & Revenue Model

Company Description

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the client's facility, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at a client's facility. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents. This segment also offers on-site management and clinical consulting services to facilities. As of December 31, 2021, the company provided its services to approximately 3,000 facilities. Healthcare Services Group, Inc. was incorporated in 1976 and is based in Bensalem, Pennsylvania.

How the Company Makes Money

Healthcare Services Group, Inc. generates revenue through service contracts with healthcare facilities. The company earns money by providing recurring and essential services such as housekeeping, laundry, and dietary management. HCSG typically enters into long-term agreements with its clients, which provide a steady revenue stream. The company may also benefit from economies of scale and operational efficiencies, allowing them to offer competitive pricing while maintaining profitability. Additionally, strategic partnerships and maintaining high service quality can contribute to client retention and expansion opportunities, further enhancing revenue potential.

Healthcare Services Financial Statement Overview

Summary

Healthcare Services demonstrates a stable financial position with consistent revenue growth, strong operational efficiency, and excellent cash flow management. The company maintains a low leverage balance sheet, positioning itself well within the Medical - Care Facilities industry. However, there is room for enhancing net profitability.

Income Statement

Healthcare Services shows solid profitability with a Gross Profit Margin of 37.0% for TTM, indicating efficient cost management. The Net Profit Margin is modest at 2.38%, suggesting room for improved efficiency. Revenue Growth Rate is positive, showing a 1.41% increase from the previous year, indicating stable growth despite industry challenges. However, the EBIT Margin is strong at 24.9%, reflecting good operational control. Overall, the income statement reflects a stable financial performance with potential for growth in profitability.

Balance Sheet

The company maintains a strong balance sheet with a low Debt-to-Equity Ratio of 0.015, indicating minimal leverage and financial stability. The Return on Equity (ROE) is 8.05%, showcasing effective utilization of equity to generate profits. The Equity Ratio of 62.5% suggests a robust capital structure with significant equity financing. Overall, the balance sheet demonstrates financial health and low risk exposure.

Cash Flow

Healthcare Services exhibits a strong Free Cash Flow Growth Rate of 220.65%, indicating improved cash generation capabilities. The Operating Cash Flow to Net Income Ratio is 2.04, highlighting efficient cash conversion from operations. However, the Free Cash Flow to Net Income Ratio is 1.90, suggesting strong cash retention for investments. While cash flows are robust, maintaining this growth trajectory is crucial for future stability.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.37B	1.72B	1.67B	1.69B	1.64B	1.76B
	Gross Profit
152.06M	228.09M	214.75M	193.84M	226.88M	267.99M
	EBIT
36.65M	53.27M	62.36M	53.50M	31.05M	90.96M
	EBITDA
81.59M	73.96M	75.21M	62.94M	77.88M	144.83M
	Net Income Common Stockholders
25.09M	39.47M	38.39M	34.24M	48.54M	98.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
114.81M	107.31M	147.46M	121.48M	185.19M	264.34M
	Total Assets
822.96M	802.77M	790.65M	718.33M	777.53M	785.03M
	Total Debt
7.95M	8.03M	36.23M	33.10M	11.30M	11.36M
	Net Debt
-56.37M	-48.74M	-18.09M	6.82M	-59.49M	-127.97M
	Total Liabilities
308.76M	302.85M	334.04M	292.16M	324.85M	304.57M
	Stockholders Equity
514.20M	499.93M	456.62M	426.17M	452.68M	480.46M
Cash Flow		Free Cash Flow
71.07M	24.47M	38.09M	-13.38M	31.42M	212.87M
	Operating Cash Flow
76.42M	30.80M	43.50M	-8.17M	37.11M	217.21M
	Investing Cash Flow
-6.70M	6.05M	-3.29M	2.58M	-22.99M	-36.84M
	Financing Cash Flow
-41.09M	-31.05M	-12.15M	-38.93M	-82.65M	-68.37M

Healthcare Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCSG, the sentiment is Positive. The current price of 14.78 is above the 20-day moving average (MA) of 14.37, above the 50-day MA of 12.92, and above the 200-day MA of 11.60, indicating a bullish trend. The MACD of 0.34 indicates Positive momentum. The RSI at 66.33 is Neutral, neither overbought nor oversold. The STOCH value of 90.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HCSG.

Healthcare Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NHC	76 Outperform	$1.61B	15.10	11.19%	2.33%	19.16%	31.92%
HCSG	73 Outperform	$1.06B	26.41	8.37%	―	3.71%	1.32%
PNTG	69 Neutral	$977.20M	36.07	11.28%	―	30.04%	43.47%
MD	63 Neutral	$1.21B	―	-10.01%	―	-1.13%	-17.77%
Sector *	54 Neutral	$5.37B	3.35	-45.10%	2.79%	16.77%	-0.01%
AVAH	53 Neutral	$1.06B	312.64	42.49%	―	9.05%	―
AMN	45 Neutral	$843.03M	18.62	-21.08%	―	-18.13%	-215.78%

Healthcare Services Corporate Events

Healthcare Services Holds Annual Shareholder Meeting

On May 27, 2025, Healthcare Services held its annual shareholder meeting to vote on various management proposals. The shareholders elected nine directors for one-year terms, approved the executive compensation in a non-binding advisory vote, and ratified Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (HCSG) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Healthcare Services stock, see the HCSG Stock Forecast page.