About HEALTHCARE SERVICES GROUP INC
Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of the client's facility, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at a client's facility. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents.
This segment also offers on-site management and clinical consulting services to facilities. As of December 31, 2021, the company provided its services to approximately 3,000 facilities. Healthcare Services Group, Inc. was incorporated in 1976 and is based in Bensalem, Pennsylvania.
HCSG operates in the Services | Healthcare | headquartered in BENSALEM, Pennsylvania | approximately 35,700 employees | led by CEO Theodore Wahl.
$1.2 billion 7.1x P/E 2.5x P/B 6.1x EV/EBITDA 29.0% ROE 8.0% rev. growth
HEALTHCARE SERVICES GROUP INC earns a Buy rating from our quantitative model with a composite score of 73/100, ranking #48 among 7,333 U.S. stocks. The model sees a stock with an above-average factor profile — not without risks, but with enough quantitative support to warrant a constructive outlook.
The strongest dimension is momentum at 90/100, which places HCSG in the top 10 percent of all stocks on this measure. value at 88/100 provides secondary support. Investors should note that investment efficiency scores a below-average 29/100, which tempers the overall profile.
Within the Services sector, HCSG ranks 3rd out of 50 peers, placing it in the 94th percentile. At $1.2 billion, the company is a small-cap stock with higher potential but also higher risk.
Quality Analysis
HEALTHCARE SERVICES GROUP INC's quality score of 74/100 reflects solid profitability that ranks above the majority of stocks. The quality factor evaluates margins, return on equity, return on assets, and earnings consistency — the fundamental building blocks of a durable business.
Return on equity of 29.0% exceeds the sector median of 6.0%. Gross margins of 21.0% suggest a commodity-like business with thin pricing power. Operating margins of 10.0% sit above the 5.0% sector average.
Net margins of 9.0% show the company is profitable, though not with exceptional efficiency.
Valuation Assessment
A value score of 88/100 puts HCSG in the top 12 percent of all stocks on cheapness — suggesting the market is significantly underpricing the company's fundamentals. Key valuation metrics include a P/E ratio of 7.1x, an EV/EBITDA of 6.1x, a price-to-book of 2.5x, a price-to-sales of 0.7x. Deep value scores like this historically correlate with above-average forward returns, though they can also reflect legitimate concerns about business quality that the value factor does not capture.
Momentum & Timing
HEALTHCARE SERVICES GROUP INC's momentum score of 90/100 places it among the strongest trending stocks in the market. The stock has been outperforming roughly 90 percent of all other companies over the relevant measurement window. The academic literature, starting with Jegadeesh and Titman's seminal 1993 research, demonstrates that stocks with this kind of relative strength tend to continue outperforming for three to twelve months.
Revenue growth of 8.0% provides a moderate fundamental underpinning. A beta of 1.13 means HEALTHCARE SERVICES GROUP INC moves roughly in line with the broader market.
Our entry timing model currently signals Neutral, which warrants caution despite the price trend.
Risk Factors
No investment comes without risks, and honest analysis requires flagging them clearly:
- Model limitations. Quantitative models measure what is measurable — financial ratios, price trends, leverage — but cannot capture qualitative factors like management quality, competitive positioning, or pending litigation. This analysis should be supplemented with fundamental due diligence.
- Market regime risk. Factor-based strategies perform differently across market regimes. The current factor exposures that support HEALTHCARE SERVICES GROUP INC's rating may become headwinds if the macro environment shifts — for example, if interest rates move sharply or if sector rotation accelerates.
Bottom Line
HEALTHCARE SERVICES GROUP INC earns a Buy rating with a composite score of 73/100 and 4 out of 5 stars, ranking #48 among 7,333 stocks. The factor profile is constructive — not without blemishes, but with enough quantitative support to position HCSG above the majority of the market.
Explore the full HCSG analysis page for interactive factor breakdowns, or view the complete stock rankings.
Analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
