Healthcare Services Group Inc. Common Stock (HCSG)

FairStock Score: 62/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Mr. Market is offering this labor-intensive outsourced services business at $20.89 as of 2026-10-13. HCSG supplies housekeeping, laundry, linen, maintenance and dietary services to nursing homes and hospitals. It is not a wonderful business in the Coca-Cola sense; it depends on 36,000 employees and low-margin service contracts. Its long-term record is lackluster: the Lynch category is slow grower—shrinking, with profit down 9.8% a year over five years and revenue up only 0.9% a year. Yet the last few filings show a recovery. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $470.8M and net income was $22.7M, or $0.32 per diluted share. That compares with a fiscal Q2 2025 net loss of $32.4M, or $0.44 per share. Fiscal Q1 2026 earned $26.1M, or $0.37 per share, on $462.8M revenue. For FY2025, revenue was $1.8B and net income was $59.1M, or $0.81 per diluted share. The balance sheet is a strength: debt-to-equity of 0.03 and Altman Z-Score of 4.66. Free cash flow is $148.5M, a 10.4% FCF yield. FairStock's P/E is 12.22 and EV/EBITDA is 7.89, but the Graham Number is $17.13, so at $20.89 the margin of safety is negative 21.95%. ROE is 24.69%, though ROCE is only 9.84%, and Piotroski is 4/9. I see a cash-generative but unspectacular slow grower, priced modestly on earnings but not cheap on assets or normalized earning power. I would want evidence that margins and revenue can persist before calling it a bargain.

In plain English: Healthcare Services Group runs cleaning, laundry, maintenance and dining services for nursing homes, rehab centers and hospitals. In fiscal 2025, sales were about $1.8 billion and profit was $59.1 million, and the latest quarter showed a profit after a loss a year earlier. At $20.89, the price looks fuller than a simple value check suggests, even though the company produces strong cash flow and carries very little debt.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer