Healthcare Services Group (NASDAQ:HCSG) Announces Earnings Results

Healthcare Services Group (NASDAQ:HCSG) released its earnings results on Wednesday. The business services provider reported $0.44 earnings per share for the quarter, topping analysts’ consensus estimates of $0.23 by $0.21, FiscalAI reports. The business had revenue of $466.68 million for the quarter, compared to analyst estimates of $467.24 million. Healthcare Services Group had a net margin of 2.20% and a return on equity of 12.23%. The business’s revenue was up 6.6% on a year-over-year basis. During the same period last year, the company posted $0.16 EPS.

Here are the key takeaways from Healthcare Services Group’s conference call:

• Company exceeded 2025 expectations with revenue of $466.7M (+6.6% YoY), strong free cash flow, disciplined cost management, and its campus division surpassing $100 million in revenue.
• Board completed a $50M buyback early and authorized an additional repurchase program to acquire $75 million of common stock over the next 12 months, citing a strong balance sheet and attractive valuation.
• 2026 targets include mid-single-digit revenue growth (Q1 revenue guide $460–$465M), a cost-of-services goal around 86%, SG&A targeted at 9.5%–10.5%, and an expected effective tax rate of ~25%.
• Contract upgrades to service-day-based billing have improved margin visibility and collections (lower DSO), but introduced a Q4-to-Q1 day-count dynamic that can affect quarterly revenue (the Q4→Q1 day difference equated to >$10M on the Q4 base).
• 2025 results benefited from an $8.3M tax/treatment of ERC receipts (a one-time benefit) and future ERC proceeds are uncertain, and management noted that growth upside is execution-limited by the company’s ability to hire, develop, and retain new management candidates.

Healthcare Services Group Trading Up 12.4%

HCSG traded up $2.40 on Wednesday, hitting $21.64. 457,912 shares of the company were exchanged, compared to its average volume of 622,408. The firm has a 50-day moving average price of $19.08 and a two-hundred day moving average price of $17.31. Healthcare Services Group has a twelve month low of $9.13 and a twelve month high of $21.63. The company has a market cap of $1.52 billion, a price-to-earnings ratio of 40.06 and a beta of 0.74.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in HCSG. Gotham Asset Management LLC boosted its position in shares of Healthcare Services Group by 116.0% during the 3rd quarter. Gotham Asset Management LLC now owns 95,362 shares of the business services provider’s stock worth $1,605,000 after acquiring an additional 51,203 shares in the last quarter. PDT Partners LLC lifted its stake in Healthcare Services Group by 145.0% during the second quarter. PDT Partners LLC now owns 103,411 shares of the business services provider’s stock worth $1,554,000 after purchasing an additional 61,196 shares during the last quarter. CANADA LIFE ASSURANCE Co boosted its holdings in Healthcare Services Group by 3.0% in the third quarter. CANADA LIFE ASSURANCE Co now owns 61,586 shares of the business services provider’s stock valued at $1,015,000 after purchasing an additional 1,809 shares in the last quarter. National Bank of Canada FI boosted its holdings in Healthcare Services Group by 5.8% in the third quarter. National Bank of Canada FI now owns 34,660 shares of the business services provider’s stock valued at $583,000 after purchasing an additional 1,891 shares in the last quarter. Finally, State of Tennessee Department of Treasury increased its stake in Healthcare Services Group by 77.1% in the second quarter. State of Tennessee Department of Treasury now owns 31,949 shares of the business services provider’s stock valued at $480,000 after purchasing an additional 13,907 shares during the last quarter. Hedge funds and other institutional investors own 97.97% of the company’s stock.

Wall Street Analyst Weigh In

HCSG has been the topic of a number of analyst reports. UBS Group reiterated a “buy” rating on shares of Healthcare Services Group in a research report on Monday, November 24th. Wall Street Zen lowered Healthcare Services Group from a “strong-buy” rating to a “buy” rating in a report on Friday, January 23rd. Benchmark upped their price objective on shares of Healthcare Services Group from $19.00 to $24.00 and gave the company a “buy” rating in a report on Thursday, October 23rd. Macquarie Infrastructure restated a “buy” rating on shares of Healthcare Services Group in a research report on Wednesday, November 26th. Finally, BMO Capital Markets assumed coverage on shares of Healthcare Services Group in a research note on Thursday, November 13th. They set a “market perform” rating and a $20.00 target price on the stock. Three equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to data from MarketBeat.com, Healthcare Services Group presently has an average rating of “Hold” and a consensus target price of $19.40.

About Healthcare Services Group

Healthcare Services Group, Inc (NASDAQ: HCSG) is a leading provider of support services to healthcare facilities across the United States. The company specializes in environmental services, including housekeeping and sanitation, as well as linen and laundry management. In addition, Healthcare Services Group offers dietary and nutrition services, catering to hospitals, skilled nursing facilities, assisted living communities and other long-term care providers.

Founded as a family-owned business in the late 1970s, the company completed its initial public offering in 1997.