Healthcare Services Group (NASDAQ:HCSG) has been downgraded from a “strong-buy” to a “buy” rating by equities researchers at Wall Street Zen, following a report issued to investors on Friday. This decision reflects a shift in market sentiment regarding the company, which provides essential services to healthcare facilities across the United States.
Several financial institutions have recently provided insights on the stock. On November 13, 2023, BMO Capital Markets initiated coverage with a “market perform” rating and established a target price of $20.00. UBS Group reaffirmed its “buy” rating on the stock in a report dated November 24, 2023. Meanwhile, Weiss Ratings maintained a “hold (C+)” rating as of the previous week.
Benchmark raised its target price from $19.00 to $24.00 in a report published on October 23, 2023, while Macquarie also reiterated a “buy” rating. Currently, three analysts recommend a buy rating for Healthcare Services Group, while four suggest holding the stock. According to data from MarketBeat, the consensus rating remains at “Hold,” with an average price target of $19.40.
Recent Earnings Performance
Healthcare Services Group released its latest earnings report on October 22, 2023, revealing a strong performance that exceeded analysts’ expectations. The company reported earnings per share (EPS) of $0.23, surpassing the consensus estimate of $0.21 by $0.02. Revenue for the quarter reached $464.34 million, exceeding analyst predictions of $460.36 million. The company’s net margin stands at 2.20%, with a return on equity of 12.23%.
Overall, Healthcare Services Group experienced an 8.5% increase in revenue year-over-year. In the same quarter of the previous year, the company reported an EPS of $0.19. Looking ahead, the firm has set its guidance for Q4 2025, with analysts forecasting an average EPS of $0.74 for the current year.
Institutional Investor Activity
In recent months, several institutional investors have adjusted their holdings in Healthcare Services Group. 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. Similarly, Amalgamated Bank raised its holdings by 3.4%, acquiring an additional 719 shares and bringing its total to 21,563 shares worth about $363,000.
HSBC Holdings PLC also expanded its position by 1.7%, now holding 53,175 shares valued at $539,000. Legal & General Group Plc increased its stake by 0.5% to 200,393 shares valued at approximately $3.37 million. Glenmede Investment Management LP raised its holdings by 3.5%, owning 29,689 shares worth around $500,000. Currently, hedge funds and institutional investors own 97.97% of the company’s stock.
Healthcare Services Group, Inc. specializes in providing management, administrative, and operational services for housekeeping, laundry, linen, facility maintenance, and dietary service departments in nursing homes, rehabilitation centers, and hospitals throughout the United States. The company operates through two primary segments: Housekeeping and Dietary.
As the market continues to evaluate the performance and potential of Healthcare Services Group, investors remain attentive to both the company’s financial health and broader market trends impacting the healthcare sector.
