Healthcare Services Group Inc. (HCSG) Shares: Cheap or Risky?

Healthcare Services Group Inc. (NASDAQ:HCSG) saw an upside of 1.80% to close Friday at $25.44 after adding $0.45 on the day. The 5-day average trading volume is 863,780 shares of the company’s common stock. It has gained $25.61 in the past week and touched a new high 5 times within the past 5 days. An average of 1,655,765 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 935,674.

HCSG’s 1-month performance is -4.00% or -$1.06 on its low of $24.39 reached on 09/22/21. The company’s shares have touched a 52-week low of $21.33 and high of $35.80, with the stock’s rally to the 52-week high happening on 01/27/21. YTD, HCSG has lost -9.47% or -$2.66 and has reached a new high 9 times. However, the current price is down -28.94%% from the 52-week high price.


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Insider Transactions

On Dec 04, 302 days have gone by since the last insider trading activity for Healthcare Services Group Inc. (HCSG). Kush Andrew (EVP & Chief Operating Officer) most recently sold 2,000 shares at $23.54 per share on Dec 04. This transaction cost the insider $47,080. Director, Ottaviano Dino D, sold 300 shares at a price of $23.16 on Dec 03. Then, on Nov 12, EVP & Chief Revenue Officer McBryan Michael E sold 15,000 shares at a price of $23.60 per share. This transaction amounted to $354,000.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 49.58 and a low of 17.94. HCSG stock has a beta of 0.44. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 1.15 while the price-to-book (PB) in the most recent quarter is 3.91, with the price to cash flow ratio at 21.83.

Healthcare Services Group Inc. pays an annual dividend of $0.83 per share. Its dividend yield is 3.26% and the payout ratio is 68.70%. HCSG’s most recent quarterly dividend payment was made on Sep. 24, when it paid $0.2090 a share compared with prior rate of $0.2070, up 0.96% from last year’s. The company has boosted its dividend for the last 18 consecutive years with the latest dividend increase of $0.0020 reported on Wednesday July 21 2021. Measured over the last 3 years, the Dividend has been growing by 7.97% yearly.

It is projected that Healthcare Services Group Inc.’s next ex-dividend date will be on 22-Nov. HCSG is expected to distribute $0.2088 as its next dividend.

Healthcare Services Group Inc.’s quick ratio for the period ended June 29 was 3.20, with the current ratio over the same period at 3.30 meaning that HCSG stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.00, while the total debt to equity was 0.00. In terms of profitability, the gross margin trailing 12 months is 16.50%The trailing 12-month EBITDA margin is 6.95% while for the period ending June 29; Healthcare Services Group Inc.’s operating margin was 6.30%. The firm’s gross profit as reported stood at $267.99 million against revenue of $1.76 billion.

The effectiveness of a company’s management is also important for investors when it comes to determining the potential profitability of the investment. Healthcare Services Group Inc.’s return on assets over the past 12 months stands at 11.40%. Return on investment over the past year is 18.00%, while its return on equity (ROE) trailing 12 months is 18.60%. In comparison, the average ROE for the broader industry over the past year is 5.54.

Earnings Surprise

For the quarterly period ending June 29 this year, Healthcare Services Group Inc.’s cash and short-term investments amounted to $125.84 million against total debt of $17.79 million. Net income and sales went down compared to those figures reported in the previous quarter. Net income shrunk -13.53% to $398.17 million, while revenue of $407.75 million was -2.41% off the previous quarter. Analysts expected HCSG to announce $0.3 per share in earnings in its latest quarter, but it posted $0.13, representing a -56.70% surprise. EBITDA for the quarter stood at more than $16.01 million. HCSG stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 329.69 million, with total debt at $17.79 million. Shareholders hold equity totaling $74.66 million

Technical Picture

Let’s look briefly at Healthcare Services Group Inc. (HCSG) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 01 October was 49.80% to suggest the stock is trending Neutral, with historical volatility in this time period at 19.00%.

The stock’s 5-day moving average is $25.28, reflecting a +2.66% or $0.66 change from its current price. HCSG is currently trading -4.04% above its 20-day SMA, -15.09% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -5.43% and -3.23% respectively.

Stochastic %K and %D was 33.97% and 33.60% and the average true range (ATR) pointed at 0.80. The RSI (14) points at 46.32%, while the 14-day stochastic is at 38.74% with the period’s ATR at 0.80. The stock’s 9-day MACD Oscillator is pointing at 0.26 and -0.01 on the 14-day charts.

Analyst Ratings

Analysts offering their rating for HCSG stock have a consensus rating for the stock as Hold. Currently, 0 brokerage advisors rate HCSG as a “sell,”, while 9 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 0 rates the stock as overweight while 2 have offered a “buy” rating.

What is HCSG’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $25.00 and a high of $38.00, with their median price target at $28.40. Looking at these predictions, the average price target given by analysts is for Healthcare Services Group Inc. (HCSG) stock is $29.23.

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