Wall Street Zen Adjusts Rating for Healthcare Services Group to Buy

Healthcare Services Group (NASDAQ:HCSG) has been downgraded from a “strong-buy” to a “buy” rating by analysts at Wall Street Zen. This change was announced in a note to investors on Friday, reflecting a shift in the company’s perceived investment potential.

Several other financial institutions have also recently shared their insights on HCSG. On November 13, 2023, BMO Capital Markets began coverage with a “market perform” rating and established a target price of $20.00 per share. In a separate report, UBS Group reaffirmed a “buy” rating on November 24, while Weiss Ratings maintained a “hold (C+)” rating on the stock in their analysis released on Tuesday. Benchmark raised their price target for Healthcare Services Group from $19.00 to $24.00, classifying the stock as a “buy” in a report dated October 23. Macquarie also reiterated a “buy” rating on the company.

Currently, three analysts have issued a “buy” recommendation for the stock, while four have assigned a “hold” rating. According to data from MarketBeat, Healthcare Services Group holds a consensus rating of “hold” with an average price target of $19.40.

Financial Performance Highlights

Healthcare Services Group released its latest earnings results on October 22, 2023. The company reported earnings per share (EPS) of $0.23, exceeding the consensus estimate of $0.21 by $0.02. Revenue for the quarter reached $464.34 million, surpassing analyst expectations of $460.36 million. The firm noted a net margin of 2.20% and a return on equity of 12.23%. Year-over-year revenue growth was recorded at 8.5%, a positive sign for investors. In the same quarter last year, the company earned $0.19 EPS.

Looking ahead, Healthcare Services Group has provided guidance for Q4 2025, with analysts forecasting an average EPS of $0.74 for the current year.

Institutional Investor Activity

Recent activity among institutional investors has also been noteworthy. Numerous hedge funds have adjusted their holdings in HCSG. Trail Ridge Investment Advisors LLC increased its stake by 2.6% during the third quarter, now owning 24,309 shares valued at approximately $409,000 after purchasing an additional 609 shares. Amalgamated Bank raised its holdings by 3.4%, bringing their total to 21,563 shares valued at $363,000.

HSBC Holdings PLC increased its stake by 1.7% in the first quarter, now owning 53,175 shares valued at $539,000. Legal & General Group Plc raised its position by 0.5%, owning 200,393 shares worth approximately $3.37 million. Glenmede Investment Management LP boosted its holdings by 3.5%, now owning 29,689 shares valued at $500,000. Collectively, hedge funds and institutional investors own 97.97% of Healthcare Services Group’s stock.

About Healthcare Services Group

Healthcare Services Group, Inc. provides management, administrative, and operational services across various departments, including housekeeping, laundry, linen, facility maintenance, and dietary services. The company serves nursing homes, retirement complexes, rehabilitation centers, and hospitals throughout the United States. It operates through two primary segments: Housekeeping and Dietary.

Investors and market analysts will continue to monitor Healthcare Services Group closely as it navigates the evolving healthcare landscape and adjusts its strategies in response to market conditions.