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Healthcare Services
(NASDAQ:HCSG)
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Rating:73Outperform
Price Target:
$28.00
▲(46.06% Upside)
Action:Reiterated
Date:05/28/26
The score is driven primarily by improving financial performance and a strong, low-debt balance sheet, reinforced by constructive earnings-call guidance and liquidity/buyback support. The main offsets are a weak-to-mixed technical backdrop and the ongoing risk that recent margin and cash-flow improvements prove lumpy rather than durable.
Positive Factors
Conservative balance sheet
Very low leverage and a stronger equity base materially reduce refinancing and solvency risk, giving management durable financial flexibility to fund organic growth, tuck-in M&A, and buybacks. This structural strength supports stability through industry cycles and interest-rate shifts.
Negative Factors
Thin and potentially lumpy margins
Margins remain structurally thin and recent improvement leaned on episodic items (workers' comp, GL efficiencies, lower bad debt). If these benefits don't recur, modest margin buffers leave profitability exposed to wage, food or occupancy shocks, challenging durable margin expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Very low leverage and a stronger equity base materially reduce refinancing and solvency risk, giving management durable financial flexibility to fund organic growth, tuck-in M&A, and buybacks. This structural strength supports stability through industry cycles and interest-rate shifts.
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
$1.57B
Dividend YieldN/A
Average Volume (3M)632.93K
Price to Earnings (P/E)23.6
Beta (1Y)1.18
Revenue Growth6.46%
EPS Growth72.30%
CountryUS
Employees35,300
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.96
Shares Outstanding68,645,210
10 Day Avg. Volume696,128
30 Day Avg. Volume632,934
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 Cap0.90
Enterprise Value/Revenue0.76
Enterprise Value/Gross Profit5.63
Enterprise Value/Ebitda14.67
Forecast
1Y Price Target
$25.60Price Target Upside33.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.07
Revenue Forecast (FY)$1.93B
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:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Positive
The call reported solid operating and financial results: revenue growth, better-than-target cost of services (83.6% vs 86% target), improved margins driven by workers' comp, liability and lower bad debt, strong liquidity (cash $214.6M and an undrawn $300M revolver extended to 2031), and an active $75M share-repurchase program. Management emphasized robust pipeline and durable industry tailwinds while noting that some cost benefits were lumpy and cash flow was impacted by a large payroll accrual adjustment. Growth execution is dependent on timing of client start dates and continued development of management candidates. Overall the positives (steady revenue growth, margin outperformance, disciplined capital returns and strong liquidity) outweigh the cautions about repeatability and timing sensitivity.Positive Updates
Revenue Growth
Total revenue of $462.8 million, a 3.4% year-over-year increase; Q2 revenue outlook of $465M–$475M and full-year target of mid-single-digit revenue growth.
Negative Updates
Cash Flow Volatility from Payroll Accrual
Operating cash flow of $43.7M was reduced to $23.4M after a $20.3M increase in payroll accrual, highlighting working-capital timing sensitivity and quarter-to-quarter variability in cash flow.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Total revenue of $462.8 million, a 3.4% year-over-year increase; Q2 revenue outlook of $465M–$475M and full-year target of mid-single-digit revenue growth.
Read all positive updates
Company Guidance
HCSG's guidance for 2026 targets mid‑single‑digit revenue growth with Q2 revenue guided to $465–$475M and sequential revenue growth expected in H2 vs. H1; management aims to run cost of services around 86% (Q1 was 83.6%, aided by ~$4.7M of workers’ comp/GL efficiencies and $3.8M of bad debt, <1% of revenue), SG&A short‑term of 9.5%–10.5% (Q1 SG&A $42.0M; adjusted $43.6M or 9.4%) with a longer‑term goal of 8.5%–9.5%, an effective tax rate of ~25% (Q1 24.6%), and corporate metrics (Q1 revenue $462.8M, +3.4% YoY; adjusted EBITDA ≈ $39M; net income $26.1M; EPS $0.37). Liquidity and capital priorities: cash & marketable securities $214.6M, $300M revolver undrawn and extended to 2031, cash from operations $43.7M (adjusted $23.4M after a $20.3M payroll accrual), a $75M share‑repurchase program (Q1 repurchases $24M, $15.3M under the new program) with 9.2M shares remaining, and continued disciplined M&A and reinvestment plans (stock‑based comp + D&A ~1.5%); using the 86% cost of sales / ~10% SG&A / 25% tax framework implies roughly a 4% pretax margin target.Healthcare Services Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
86
Very Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.85B | 1.84B | 1.72B | 1.67B | 1.69B | 1.64B |
| Gross Profit | 251.34M | 239.41M | 228.09M | 214.75M | 193.31M | 230.57M |
| EBITDA | 96.40M | 86.22M | 73.96M | 75.26M | 62.86M | 81.56M |
| Net Income | 67.89M | 59.06M | 39.47M | 38.39M | 34.24M | 48.54M |
Balance Sheet | ||||||
| Total Assets | 814.85M | 807.78M | 815.47M | 803.18M | 718.33M | 786.80M |
| Cash, Cash Equivalents and Short-Term Investments | 178.61M | 203.89M | 135.77M | 147.46M | 121.48M | 185.19M |
| Total Debt | 14.65M | 24.68M | 16.43M | 43.63M | 33.10M | 17.80M |
| Total Liabilities | 301.08M | 297.57M | 315.55M | 346.57M | 292.16M | 334.12M |
| Stockholders Equity | 513.77M | 510.21M | 499.93M | 456.62M | 426.17M | 452.68M |
Cash Flow | ||||||
| Free Cash Flow | 155.72M | 139.15M | 24.47M | 38.09M | -13.38M | 31.42M |
| Operating Cash Flow | 161.20M | 144.97M | 30.80M | 43.50M | -8.17M | 37.11M |
| Investing Cash Flow | -8.08M | -11.00M | 6.05M | -3.29M | 2.58M | -22.99M |
| Financing Cash Flow | -81.23M | -63.33M | -31.05M | -12.15M | -38.93M | -82.65M |
Healthcare Services Technical Analysis
Positive
19.17
Price Trends
21.88
Positive
20.90
Positive
19.46
Positive
Market Momentum
1.02
Negative
78.32
Negative
86.96
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 19.17 is below the 20-day moving average (MA) of 22.71, below the 50-day MA of 21.88, and below the 200-day MA of 19.46, indicating a bullish trend. The MACD of 1.02 indicates Negative momentum. The RSI at 78.32 is Negative, neither overbought nor oversold. The STOCH value of 86.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.57B | 23.61 | 13.60% | ― | 6.46% | 72.30% | |
71 Outperform | $1.34B | 43.28 | 9.23% | ― | 36.76% | 11.22% | |
70 Outperform | $1.94B | 63.30 | 3.88% | ― | 56.69% | -15.92% | |
64 Neutral | $1.28B | 9.37 | 9.08% | ― | 6.72% | -39.63% | |
57 Neutral | $963.65M | 813.88 | 0.24% | 2.25% | 13.73% | -77.14% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $2.93B | -2.61 | -43.82% | ― | 6.80% | -698.20% |
* Healthcare Sector Average
HCSG
Healthcare Services
25.15
10.38
70.28%
ACHC
Acadia Healthcare
31.91
8.59
36.84%
USPH
US Physical Therapy
72.35
-5.06
-6.53%
ASTH
Astrana Health
49.17
25.02
103.60%
PNTG
Pennant Group
38.52
12.67
49.01%
ARDT
Ardent Health Partners, Inc.
10.76
-2.54
-19.10%
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...
Business Operations and StrategyPrivate Placements and Financing
Healthcare Services Amends Credit Facility to Extend Maturity
Positive
Apr 13, 2026
On April 7, 2026, Healthcare Services Group, Inc. entered into a Second Amendment to its existing Credit Agreement, originally dated December 21, 2018 and previously amended in 2022, with its subsidiary borrowers, a syndicate of lenders, and PNC B...
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.