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Investing.com - Benchmark has reiterated its Buy rating and $19.00 price target on Healthcare Services Group (NASDAQ:HCSG) ahead of the company’s upcoming third-quarter earnings release. The stock, currently trading at $16.50, has shown remarkable momentum with a 71.74% return over the past six months. InvestingPro data reveals that 2 analysts have recently revised their earnings estimates upward for the upcoming period.
Healthcare Services Group is scheduled to report its third-quarter results on October 22, with a conference call planned for 8:30 ET that morning. The company enters this earnings season with strong financial health, maintaining more cash than debt on its balance sheet and a healthy current ratio of 2.49. Discover more detailed financial insights with a comprehensive Pro Research Report, available exclusively on InvestingPro.
The research firm noted that HCSG is currently experiencing accelerating contract growth and high retention rates, with revenue growth running slightly ahead of management’s previous guidance for mid-single digit growth for the full year.
Benchmark identified several positive drivers for the company, including supportive skilled nursing facility trends with occupancy now reaching pre-COVID levels, net positive impact on Medicaid from the OBBBA, and moderate wage pressures.
The firm also highlighted that management remains satisfied with current client credit quality and suggested that the skilled nursing facility industry is approaching a favorable position with rising occupancy while capacity remains relatively flat.
In other recent news, Healthcare Services Group reported its second-quarter 2025 financial results, revealing a net loss of $32.4 million and an earnings per share (EPS) of -$0.44, which fell short of the forecasted EPS of $0.20. However, the company’s revenue reached $458.5 million, exceeding expectations by 1.71%. Following these results, Benchmark raised its price target for Healthcare Services Group to $19.00 from $17.00, maintaining a Buy rating due to the better-than-expected revenue and an updated full-year cash flow outlook of $70 million-$85 million. Additionally, Macquarie upgraded the company’s stock from Neutral to Outperform, citing a positive growth outlook and stable industry fundamentals. Macquarie also adjusted its price target to $16.00 from $15.00. These developments reflect a mixed but cautiously optimistic sentiment among analysts regarding Healthcare Services Group’s performance and future prospects.
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