Healthcare Services Group Earnings Preview

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Healthcare Services Group (NAS: HCSG) only managed to meet estimates last quarter, but investors hope it will surpass expectations this quarter. The company will unveil its latest earnings on Monday. Healthcare Services Group provides housekeeping, laundry, linen, facility maintenance, and dietary services to the health care industry, including nursing homes, retirement complexes, rehabilitation centers, and hospitals located throughout the U.S.

What analysts say:
 

  • Buy, sell, or hold?: Analysts strongly back Healthcare Services Group, with four of six rating it a buy and the remainder rating it a hold. Analysts like Healthcare Services Group better than competitor ABM Industries overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $216.2 million in revenue this quarter. That would represent a rise of 10.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from $0.15 to $0.16.

What our community says:
CAPS All-Stars are solidly backing the stock with 98.6% awarding it an outperform rating. The community at large concurs with the All-Stars with 92.9% giving it a rating of outperform. Fools have embraced Healthcare Services Group, though the message boards have been quiet lately with only 93 posts in the past 30 days. Even with a robust four out of five stars, Healthcare Services Group's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Healthcare Services Group's profit has risen year over year by an average of 16.9% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

14.1%

13.6%

14.4%

13.7%

Operating Margin

6.7%

5.6%

6.6%

6.3%

Net Margin

4.6%

3.7%

4.5%

4.7%

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At the time this article was published

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