Healthcare Services Group Secures $19.40 Average Target Price from Analysts

Healthcare Services Group, Inc. (NASDAQ:HCSG) has received an average target price of $19.40 from analysts, based on a recent report from Marketbeat. The consensus rating among seven research firms covering the company is “Hold,” with four analysts recommending holding the stock and three suggesting a buy.

In a notable shift, Wall Street Zen upgraded Healthcare Services Group from a “buy” to a “strong-buy” rating on January 10, 2023. This change reflects growing confidence in the company’s prospects. Additionally, Benchmark revised its price target from $19.00 to $24.00, maintaining a “buy” rating in a report issued on October 23, 2023. Conversely, Zacks Research downgraded the stock from a “strong-buy” to a “hold” rating on September 30, 2023. UBS Group and Macquarie both reiterated their “buy” ratings in reports published in late November.

Financial Performance and Market Response

Healthcare Services Group released its quarterly earnings results on October 22, 2023, reporting earnings of $0.23 per share, surpassing the consensus estimate of $0.21 by $0.02. Revenue for the quarter stood at $464.34 million, exceeding expectations of $460.36 million. The company’s year-over-year revenue growth reached 8.5%, with a net margin of 2.20% and a return on equity of 12.23%.

Looking ahead, analysts project that Healthcare Services Group will achieve an earnings per share (EPS) of $0.74 for the current fiscal year. This forecast underscores the company’s potential for continued growth in the competitive healthcare services sector.

Investment Activity and Institutional Ownership

Recent trading activity indicates increased interest from institutional investors. Several hedge funds have adjusted their positions in Healthcare Services Group. Hennion & Walsh Asset Management Inc. increased its holdings by 14.8% in the fourth quarter, now owning 38,912 shares valued at $744,000. SG Americas Securities LLC significantly bolstered its stake by 298.1%, acquiring an additional 32,752 shares, bringing its total to 43,739 shares worth $836,000.

Wealth Enhancement Advisory Services LLC also expanded its position by 44.0%, owning 24,557 shares worth $463,000 after purchasing an additional 7,507 shares. CWA Asset Management Group LLC increased its holdings by 2.9%, now owning 84,353 shares valued at $1.61 million. In total, institutional investors control 97.97% of the company’s stock.

Healthcare Services Group, established in the late 1970s and publicly listed since 1997, remains a leading provider of support services to healthcare facilities across the United States. The company specializes in environmental services, linen management, and dietary services catering to hospitals and long-term care providers. Its sustained growth and strategic ratings reflect its significant role in the healthcare sector.