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Healthcare Services
(NASDAQ:HCSG)
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Rating:76Outperform
Price Target:
$26.00
▲(14.34% Upside)
Action:Reiterated
Date:07/25/26
HCSG scores well on fundamentals—especially its very low leverage balance sheet and the recent step-up in revenue, margins, and earnings—supported by a constructive earnings call with reaffirmed guidance, cost discipline, and strong liquidity/share repurchases. The main offsets are weaker near-term technical momentum and some cash-flow/margin variability plus inflation-related execution risks.
Positive Factors
Very low leverage / strong balance sheet
Extremely low leverage and a growing equity base provide durable financial flexibility. With minimal debt service the company can fund organic rollouts, small M&A, and buybacks without stressing liquidity, improving resilience through economic cycles and reducing refinancing risk.
Negative Factors
Historical cash-flow volatility
While recent free cash flow is strong, prior negative OCF years and recent FCF decline show volatility. Variable cash conversion complicates forecasting, limits predictable reinvestment or buybacks, and raises the risk that episodic shortfalls could force tougher capital-allocation choices.
Read all positive and negative factors
Positive Factors
Negative Factors
Very low leverage / strong balance sheet
Extremely low leverage and a growing equity base provide durable financial flexibility. With minimal debt service the company can fund organic rollouts, small M&A, and buybacks without stressing liquidity, improving resilience through economic cycles and reducing refinancing risk.
Read all positive factors
Healthcare Services Key Performance Indicators (KPIs)
Any
Revenue By Segment
Examines revenue contributions from different business segments, indicating which areas drive growth and where the company might focus future expansion efforts.
Examines revenue contributions from different business segments, indicating which areas drive growth and where the company might focus future expansion efforts.
Data provided by:
The Fly
The FlyHealthcare Services (HCSG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.60B
Dividend YieldN/A
Average Volume (3M)774.23K
Price to Earnings (P/E)13.5
Beta (1Y)1.15
Revenue Growth5.22%
EPS Growth1109.87%
CountryUS
Employees36,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)1.73
Shares Outstanding68,632,200
10 Day Avg. Volume844,930
30 Day Avg. Volume774,228
Financial Highlights & Ratios
PEG Ratio0.45
Price to Book (P/B)2.71
Price to Sales (P/S)0.75
P/FCF Ratio9.95
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.00Price Target Upside14.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)1.19
Revenue Forecast (FY)$1.92B
Healthcare Services Business Overview & Revenue Model
Company Description
Healthcare Services Group, Inc., established in 1976 and based in Bensalem, Pennsylvania, provides outsourced management and operational services to healthcare and senior living facilities nationwide. The company supports departments such as house...
How the Company Makes Money
HCSG makes money by contracting with healthcare facilities to provide outsourced, on-site operational services—primarily housekeeping, laundry, and dining/nutrition services. Revenue is generated through service fees billed to client facilities un...
Healthcare Services Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented multiple operational and financial strengths: solid Q2 revenue and EPS, better-than-target cost of services, improving bad debt, strong liquidity, active share repurchases, a growing M&A pipeline, and favorable long-term industry tailwinds (demographics and workforce recovery). Noted risks include a Q2 uptick in food inflation, ongoing wage-inflation monitoring, lumpy actuarial insurance adjustments, ERC receipt uncertainty, and growth timing tied to manager capacity. Overall, the positives are more numerous and appear manageable, while the risks are primarily timing and macro-related rather than structural.Positive Updates
Revenue and Earnings
Reported Q2 revenue of $470.8 million, net income of $22.7 million, and diluted EPS of $0.32, demonstrating continued profitability and stable top-line performance.
Negative Updates
Inflation and Supply Risk
Management is monitoring volatility in global energy and supply markets due to geopolitical conflicts; CPI food-at-home inflation increased by 1.0% in Q2 (first sequential uptick after declines), posing potential cost pressure despite contractual pass-through rights.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Earnings
Reported Q2 revenue of $470.8 million, net income of $22.7 million, and diluted EPS of $0.32, demonstrating continued profitability and stable top-line performance.
Read all positive updates
Company Guidance
Management reaffirmed a 2026 mid‑single‑digit revenue growth outlook and gave Q3 revenue guidance of $475–$485 million, while targeting cost of services around 86% (Q2: 84.1% on $396.0M) and SG&A in a 9.5%–10.5% range (Q2: $52.6M; adjusted $45.7M or 9.7%; long‑term 8.5%–9.5%). They expect a ~25% effective tax rate for 2026 (Q2: 26.8%) and emphasized cash optimization (increased payment frequency, enhanced contracts, working‑capital discipline) after reporting Q2 results of $470.8M revenue, $22.7M net income, $0.32 diluted EPS, cash flow from operations $21.9M ($27.9M ex‑payroll accrual), cash and marketable securities $200.9M, an undrawn $300M revolver, segment results—Environmental Services $213.2M at 13.3% margin and Dietary $257.6M at 7.5%—and continued capital allocation via M&A and a $75M share repurchase plan (YTD repurchases $44.9M, Q2 $20.9M, 8.3M shares remaining).Healthcare Services Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.86B | 1.84B | 1.72B | 1.67B | 1.69B | 1.64B |
| Gross Profit | 323.17M | 239.41M | 228.09M | 214.75M | 193.31M | 230.57M |
| EBITDA | 150.57M | 86.22M | 73.96M | 75.26M | 62.86M | 81.56M |
| Net Income | 122.95M | 59.06M | 39.47M | 38.39M | 34.24M | 48.54M |
Balance Sheet | ||||||
| Total Assets | 820.86M | 807.78M | 815.47M | 803.18M | 718.33M | 786.80M |
| Cash, Cash Equivalents and Short-Term Investments | 200.87M | 203.89M | 135.77M | 147.46M | 121.48M | 185.19M |
| Total Debt | 17.73M | 24.68M | 16.43M | 43.63M | 33.10M | 17.80M |
| Total Liabilities | 302.01M | 297.57M | 315.55M | 346.57M | 292.16M | 334.12M |
| Stockholders Equity | 518.84M | 510.21M | 499.93M | 456.62M | 426.17M | 452.68M |
Cash Flow | ||||||
| Free Cash Flow | 151.46M | 139.15M | 24.47M | 38.09M | -13.38M | 31.42M |
| Operating Cash Flow | 157.21M | 144.97M | 30.80M | 43.50M | -8.17M | 37.11M |
| Investing Cash Flow | -19.49M | -11.00M | 6.05M | -3.29M | 2.58M | -22.99M |
| Financing Cash Flow | -94.48M | -63.33M | -31.05M | -12.15M | -38.93M | -82.65M |
Healthcare Services Technical Analysis
Neutral
22.74
Price Trends
22.96
Negative
21.63
Positive
20.41
Positive
Market Momentum
-0.24
Positive
39.98
Neutral
13.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCSG, the sentiment is Neutral. The current price of 22.74 is below the 20-day moving average (MA) of 23.57, below the 50-day MA of 22.96, and above the 200-day MA of 20.41, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 39.98 is Neutral, neither overbought nor oversold. The STOCH value of 13.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HCSG.
Healthcare Services Risk Analysis
Healthcare Services disclosed 23 risk factors in its most recent earnings report. Healthcare Services reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Healthcare Services Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.60B | 13.47 | 24.12% | ― | 5.22% | 1109.87% | |
64 Neutral | $1.20B | 158.12 | 0.48% | 2.44% | 13.73% | -77.14% | |
64 Neutral | $1.53B | 11.23 | 6.39% | ― | 6.72% | -39.63% | |
63 Neutral | $1.76B | 57.58 | 5.09% | ― | 56.69% | -15.92% | |
62 Neutral | $1.40B | 45.30 | 9.51% | ― | 36.76% | 11.22% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $2.76B | -2.38 | -50.02% | ― | 4.27% | -917.61% |
* Healthcare Sector Average
HCSG
Healthcare Services
22.23
7.76
53.63%
ACHC
Acadia Healthcare
31.53
12.46
65.34%
USPH
US Physical Therapy
80.05
-4.53
-5.35%
ASTH
Astrana Health
35.76
7.07
24.64%
PNTG
Pennant Group
39.00
12.85
49.14%
ARDT
Ardent Health Partners, Inc.
11.55
-0.49
-4.07%
Healthcare Services Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Healthcare Services Shareholders Approve Directors, Pay and Plan
Positive
May 27, 2026
On May 26, 2026, Healthcare Services held its annual meeting of shareholders, where investors elected nine directors to one-year terms, with all company nominees receiving the required plurality of votes. Shareholders also approved, on an advisory...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.