Healthcare Services Group (NASDAQ:HCSG) Shares Gap Up After Better-Than-Expected Earnings

Key Points

• Shares gapped up after the company reported quarterly EPS of $0.37 versus the $0.22 consensus (beat by $0.15), although revenue of $462.77M missed estimates; the stock opened at $24.00 after a $19.35 close and last traded near $23.51.
• Analyst and insider signals conflict: MarketBeat shows a consensus "Hold" with a $22 target (price targets $22–$25), while insiders sold 146,962 shares (~$3.01M) in the past 90 days, substantially reducing their positions.

Shares of Healthcare Services Group, Inc. (NASDAQ:HCSG - Get Free Report) gapped up prior to trading on Wednesday following a better than expected earnings announcement. The stock had previously closed at $19.35, but opened at $24.00. Healthcare Services Group shares last traded at $23.5050, with a volume of 249,884 shares changing hands.

The business services provider reported $0.37 earnings per share for the quarter, topping the consensus estimate of $0.22 by $0.15. The business had revenue of $462.77 million during the quarter, compared to analysts' expectations of $479.79 million. Healthcare Services Group had a return on equity of 16.04% and a net margin of 3.21%.The firm's revenue for the quarter was up 3.4% compared to the same quarter last year. During the same period last year, the firm posted $0.23 EPS.

Analysts Set New Price Targets

HCSG has been the subject of several recent analyst reports. Robert W. Baird set a $23.00 price objective on shares of Healthcare Services Group in a research report on Thursday, February 12th. Benchmark reiterated a "buy" rating on shares of Healthcare Services Group in a research note on Thursday, February 12th. Royal Bank Of Canada began coverage on Healthcare Services Group in a report on Tuesday, March 3rd. They set a "sector perform" rating and a $22.00 price target for the company. UBS Group set a $25.00 price objective on Healthcare Services Group and gave the stock a "buy" rating in a research report on Thursday, February 12th. Finally, Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Healthcare Services Group in a research note on Monday, December 29th. Four research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold" and a consensus target price of $22.00.

Insider Transactions at Healthcare Services Group

In related news, EVP John Christopher Shea sold 54,357 shares of the company's stock in a transaction dated Wednesday, February 18th. The stock was sold at an average price of $20.41, for a total transaction of $1,109,426.37. Following the sale, the executive vice president owned 29,292 shares in the company, valued at $597,849.72. This represents a 64.98% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Patrick J. Orr sold 45,500 shares of Healthcare Services Group stock in a transaction that occurred on Wednesday, February 18th. The stock was sold at an average price of $20.54, for a total value of $934,570.00. Following the completion of the sale, the executive vice president owned 44,615 shares of the company's stock, valued at approximately $916,392.10. The trade was a 50.49% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 146,962 shares of company stock worth $3,014,100. Company insiders own 2.10% of the company's stock.

Hedge Funds Weigh In On Healthcare Services Group

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Synergy Asset Management LLC purchased a new stake in shares of Healthcare Services Group in the third quarter valued at about $2,860,000. Allianz Asset Management GmbH boosted its holdings in Healthcare Services Group by 229.4% during the third quarter. Allianz Asset Management GmbH now owns 164,380 shares of the business services provider's stock worth $2,767,000 after purchasing an additional 114,482 shares during the last quarter. JPMorgan Chase & Co. grew its position in Healthcare Services Group by 46.6% in the 3rd quarter. JPMorgan Chase & Co. now owns 553,663 shares of the business services provider's stock worth $9,318,000 after purchasing an additional 175,880 shares in the last quarter. Allspring Global Investments Holdings LLC grew its position in Healthcare Services Group by 38.8% in the 3rd quarter. Allspring Global Investments Holdings LLC now owns 345,332 shares of the business services provider's stock worth $5,812,000 after purchasing an additional 96,472 shares in the last quarter. Finally, Bailard Inc. purchased a new stake in Healthcare Services Group in the 3rd quarter valued at about $655,000. Institutional investors own 97.97% of the company's stock.

Healthcare Services Group Stock Performance

The stock has a 50 day moving average price of $19.95 and a 200 day moving average price of $18.94. The company has a market capitalization of $1.66 billion, a P/E ratio of 29.38 and a beta of 0.80.

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.

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