Healthcare Services Group Gains “Moderate Buy” Rating from Analysts

Healthcare Services Group, Inc. (NASDAQ: HCSG) has received a consensus recommendation of “Moderate Buy” from six brokerages following a review of the company’s stock performance. According to Marketbeat.com, this assessment includes three hold ratings and three buy ratings, with an average 12-month price target set at $16.25.

Several investment firms have recently adjusted their price targets for HCSG. On July 24, 2024, Benchmark raised its price objective from $17.00 to $19.00 while maintaining a buy rating. Meanwhile, Robert W. Baird increased its price target from $13.00 to $15.00 but assigned a neutral rating in the same report.

In a subsequent report on July 26, 2024, Wall Street Zen downgraded HCSG from a “strong-buy” rating to a “buy” rating. Macquarie, on the other hand, upgraded its rating from neutral to outperform and raised its price target from $15.00 to $16.00 on July 29, 2024. Additionally, Weiss Ratings reaffirmed a hold (C-) rating on September 27, 2024.

Institutional Investments Reflect Confidence

A number of hedge funds and institutional investors have modified their stakes in Healthcare Services Group recently. HSBC Holdings PLC increased its holdings by 1.7% in the first quarter, now owning 53,175 shares valued at approximately $539,000 after acquiring an additional 868 shares.

Trail Ridge Investment Advisors LLC also expanded its position by 4.7% during the same period, bringing its total to 23,233 shares valued at about $234,000. The Commonwealth of Pennsylvania Public School Employees Retirement System followed suit, increasing its stake by 6.5% in the second quarter, now owning 18,721 shares worth around $281,000.

Moreover, the Police & Firemen’s Retirement System of New Jersey boosted its holdings by 8.3%, now possessing 15,925 shares valued at $239,000. SummerHaven Investment Management LLC also increased its stake by 1.8%, owning 73,841 shares with a total value of approximately $744,000. Currently, institutional investors hold 97.97% of HCSG’s stock.

Stock Performance and Financial Overview

As of the last trading session, HCSG opened at $16.30. The company’s market capitalization stands at $1.18 billion, with a price-to-earnings (P/E) ratio of 116.43 and a beta of 0.70. Over the past year, the stock has fluctuated between a low of $9.13 and a high of $16.91. The fifty-day moving average is $15.35, while the 200-day moving average is $13.84.

The most recent quarterly earnings report, released on July 23, 2024, showed earnings per share of $0.21, exceeding analysts’ expectations of $0.20 by $0.01. The firm reported revenues of $458.50 million, surpassing the anticipated $450.78 million. HCSG recorded a net margin of 0.61% and a return on equity of 11.74%, with quarterly revenue reflecting a 7.6% increase compared to the same quarter the previous year.

Looking ahead, analysts project that Healthcare Services Group will post an earnings per share (EPS) of $0.74 for the current fiscal year.

Healthcare Services Group, Inc. provides management, administrative, and operational services to various departments, including housekeeping, laundry, and dietary services, primarily in nursing homes, rehabilitation centers, and hospitals across the United States. The company operates through two segments: Housekeeping and Dietary.