Healthcare Services Group, Inc.
$20.19
-0.25%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.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is elevated (P/E 24.6).
Valuation inputs: P/E 24.6, earnings yield +4.1%, momentum -0.2%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is acceptable (ROE +11.6%, ROIC +6.6%).
Profitability stack: net margin +3.2%, ROE +11.6%, ROIC +6.6%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +36.8%, momentum -0.2%, net margin +3.2%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Healthcare Services Group, Inc. Market vs Earnings Trajectory
Performance Analysis
EPS Growth
Strong earnings growth indicates robust business expansion and improving profitability.
Price-EPS Relationship
Stock price is moving in line with earnings growth—a healthy sign of fundamental-driven valuation.
Stock Price Change
Over the 1Y period, stock price has increased by 41.7%.
P/E Ratio (TTM)
Moderate P/E ratio suggests fair market valuation relative to earnings.
Key Insight
Strong earnings growth (+585.7%) is outpacing price appreciation (+41.7%), potentially indicating an attractive entry point as the market may not have fully recognized the improving fundamentals.
Healthcare Services Group, Inc. Fair Value Envelope
Healthcare Services Group, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Thin margins leave little room for error. Cost management and pricing strategy are critical.
Operating Margin
Minimal operating profit suggests high operating costs or pricing challenges. Scalability is concerning.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.
Profitability Insight
Efficient profit conversion: Minimal margin compression from gross to net indicates lean operations and favorable tax/interest environment.
Healthcare Services Group, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Moderate working capital outflow. Typical for growing businesses, but ensure it's supporting revenue growth, not inefficiency.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
Healthcare Services Group, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Conservative capital structure. The company relies primarily on equity financing, indicating low financial risk.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Asset-light business model with high liquidity. Majority of assets are easily convertible to cash.
Financial Health Insight
Strong financial foundation: Excellent liquidity combined with conservative leverage suggests the company is well-positioned to weather economic uncertainties and fund growth opportunities.
Healthcare Services Group, Inc. Street Expectations Map
Wall Street analysts project that HCSG stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 24.50, with estimates ranging from a low of 23.00 to a high of 27.00.
The consensus 1-year price target stands at 24.50, with estimates ranging from a low of 23.00 to a high of 27.00.
Analyst Consensus Analysis
Upside Potential
Strong upside potential. Consensus indicates attractive return opportunity with favorable risk-reward profile.
Analyst Agreement
High analyst agreement. Narrow target range indicates strong consensus on valuation, suggesting clear investment thesis and predictable outlook.
Analyst Conviction
Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.
Market Sentiment Insight
Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.
Healthcare Services Group, Inc. Insider Positioning
During the last 12 months, insiders have purchased $34K and sold $2.77M worth of HCSG shares, resulting in $2.73M of net selling activity.
3 Months
0
0.00
0
0.00
+0
+$0
3-6 Months
0
0.00
74.7K
1.54M
-1.5M
-$1.54M
6-9 Months
1.0K
17.52K
49.6K
947.11K
-930K
-$930K
9-12 Months
1.1K
15.99K
21.4K
283.13K
-267K
-$267K
Top Buyers
Simmons Kurt Jr
Director
$30K
Whalen Thomas Gerard
Director
$3K
Top Sellers
Orr Patrick J
Officer: Evp & Chief Revenue Officer
$1.16M
Shea John Christopher
Officer: Evp & Chief Admin. Officer
$601K
Kush Andrew
Officer: Evp & Chief Operating Officer
$547K
Bundick Jason J
Officer: Evp/Gen. Counsel/Corp. Secty.
$400K
Brophy Andrew M
Officer: Svp & Chief Accounting Officer
$54K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $2.73M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Insider Participation
5 insider sellers vs. 2 buyers. Widespread selling across multiple insiders may signal concerns.
hcsg Dividend History
Learning Layer
Related Guides
Build conviction on HCSG by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.