Healthcare Services Group (NASDAQ:HCSG) Reaches New 1-Year High on Better-Than-Expected Earnings

Shares of Healthcare Services Group, Inc. (NASDAQ:HCSG) hit a new 52-week high during mid-day trading on Wednesday following a better than expected earnings announcement. The stock traded as high as $21.63 and last traded at $20.8720, with a volume of 309327 shares changing hands. The stock had previously closed at $19.24.

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

Key Headlines Impacting Healthcare Services Group

Here are the key news stories impacting Healthcare Services Group this week:

• Positive Sentiment: Q4 EPS beat and improving profitability — HCSG reported $0.44 EPS versus a $0.23 consensus (FYI: revenue was roughly in line and up 6.6% YoY), evidence of margin recovery and stronger earnings power. MarketBeat Earnings Release
• Positive Sentiment: $75M share repurchase + 2026 growth target — Management authorized a $75 million buyback and guided to mid-single-digit revenue growth for 2026, both supportive of EPS upside and valuation re-rating. Buyback & Guidance Article
• Positive Sentiment: Earnings call detail and positive investor writeups — Analysts and transcripts highlight sustained demand trends and management commentary that reinforced the beat and buyback, helping lift sentiment. Earnings Call Transcript
• Neutral Sentiment: Revenue roughly in line with estimates — Q4 revenue was $466.7M vs. consensus $467.2M (up 6.6% YoY), so top-line acceleration is modest and not the primary beat driver. Earnings Highlights
• Neutral Sentiment: Conflicting short-interest data — Recent entries show a large January drop in short interest (~1.53M shares, ~2.2% of float) but other reported counts show 0 shares/NaN (data error). The January decline suggests some short covering, but the conflicting reports add uncertainty.
• Negative Sentiment: Valuation and margin remain considerations — The stock trades at a high P/E (~41x) and reported a low net margin (~2.2%), which leaves the name sensitive to any slowdown in revenue or margin pressure and could limit upside absent continued execution. Valuation Discussion

Wall Street Analyst Weigh In

Several equities research analysts recently commented on the company. Wall Street Zen cut Healthcare Services Group from a “strong-buy” rating to a “buy” rating in a report on Friday, January 23rd. BMO Capital Markets assumed coverage on shares of Healthcare Services Group in a research note on Thursday, November 13th. They issued a “market perform” rating and a $20.00 price target for the company. Benchmark upped their price target on Healthcare Services Group from $19.00 to $24.00 and gave the company a “buy” rating in a report on Thursday, October 23rd. UBS Group restated a “buy” rating on shares of Healthcare Services Group in a research note on Monday, November 24th. Finally, Weiss Ratings reaffirmed a “hold (c+)” rating on shares of Healthcare Services Group in a research report on Monday, December 29th. Three research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and an average price target of $19.40.

Hedge Funds Weigh In On Healthcare Services Group

Several institutional investors and hedge funds have recently bought and sold shares of the business. Miller Global Investments LLC acquired a new stake in shares of Healthcare Services Group in the fourth quarter worth about $26,000. EverSource Wealth Advisors LLC lifted its holdings in shares of Healthcare Services Group by 163.4% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,186 shares of the business services provider’s stock worth $33,000 after acquiring an additional 1,356 shares during the period. GAMMA Investing LLC raised its holdings in shares of Healthcare Services Group by 94.9% in the 3rd quarter. GAMMA Investing LLC now owns 2,843 shares of the business services provider’s stock worth $48,000 after buying an additional 1,384 shares in the last quarter. Farther Finance Advisors LLC boosted its stake in shares of Healthcare Services Group by 32.0% in the 4th quarter. Farther Finance Advisors LLC now owns 3,619 shares of the business services provider’s stock valued at $69,000 after purchasing an additional 877 shares in the last quarter. Finally, LSV Asset Management bought a new stake in Healthcare Services Group during the third quarter worth about $108,000. Hedge funds and other institutional investors own 97.97% of the company’s stock.

Healthcare Services Group Stock Performance

The company has a 50-day simple moving average of $19.15 and a 200-day simple moving average of $17.35. The stock has a market cap of $1.57 billion, a P/E ratio of 41.26 and a beta of 0.74.

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.