Healthcare Services ‘noisy’ Q2 report creates buying opportunity, says Benchmark

Benchmark analyst Bill Sutherland says Healthcare Services Group reported a “noisy” Q2 print that also included positive forward indicators including guidance for a solid uptick in revenue growth in the second half and reiteration of FY24 adjusted operating cash flow guidance. The stock sold off 5% yesterday as investors digested an adjusted EBITDA miss resulting from a non-cash bad debt expense and an adjusted operating cash flow miss due to delayed CMS payments, but the firm views the pullback as a buying opportunity and reiterates its Buy rating and $17 price target on Healthcare Services shares.