HCSG

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the positive business environment to a multi-decade demographic tailwind, noting that the first baby boomers turn 80 in 2026, which is the primary age cohort for long-term care utilization. Revenue performance was supported by steady occupancy and a growing industry workforce that has recovered to pre-pandemic baselines, alongside a stable reimbursement environment. Operational outperformance in the quarter was driven by strong service execution and lower bad debt expense, which remained below the historical average of 1%-1.5% of revenue. Strategic positioning is focused on a 'financial stewardship' model, utilizing longstanding vendor partnerships to provide visibility and stability amidst global energy and supply market volatility. The company is utilizing contractual frameworks to pass through unavoidable food and wage inflationary costs, effectively preserving margins despite macro pressures. Growth is being fueled by a structured sales process and the development of internal management candidates to fund new business opportunities while maintaining a retention rate above 90%. Management reaffirmed its 2026 mid-single-digit revenue growth outlook, with expectations for a significant growth ramp in the second half of the year based on current pipeline visibility. Third quarter revenue is projected to be in the $475 million to $485 million range, assuming continued conversion of sales pipeline opportunities and management capacity timing. The company aims to manage cost of services in the 86% range and SG&A in the 9.5%-10.5% range, with a long-term goal of reducing SG&A to 8.5%-9.5%. Strategic priorities for the remainder of the year include optimizing cash flow through increased customer payment frequency and enhanced contract terms. The 2026 effective tax rate is expected to be approximately 25%, while capital allocation remains focused on organic growth, M&A, and a $75 million share repurchase target. The company reported a $1.3 million benefit from an actuarial review of self-insurance reserves, though management expects this benefit to trend toward zero as reserves reach a steady state. Management is monitoring the Genesis bankruptcy, expecting the sale to close in late Q3 or early Q4 2026 without disruption to current operations or payments. A small strategic acquisition was completed in the campus business during Q2 to enhance footprint and capabilities, though its immediate revenue contribution is considered insignificant. Geopolitical conflicts and volatility in global energy markets are noted as ongoing risks, though sourcing pivots are prepared to mitigate direct exposure. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that the confidence in a Q4 ramp is grounded in a mix of signed contracts awaiting start dates and high-probability opportunities in the pipeline. The timing of growth is influenced by HCSG management capacity and client start date preferences rather than a lack of demand. CPI food-at-home inflation increased to 1% in Q2 after three quarters of declines, but HCSG acts as a steward to mitigate these costs or pass them through contractually. Wage inflation showed a seasonal uptick in Q1 to 1.1%, but the labor market is stabilizing, improving the company's ability to hire and retain staff. Bad debt expense was $4.3 million (less than 1% of revenue), benefiting from collection initiatives and enhanced contract terms. The insurance benefit is a non-cash actuarial true-up; management warned this number is lumpy and difficult to predict, ranging from $1.5 million to $4.5 million historically. Dietary services remain only 50% penetrated within the existing Environmental Services customer base, representing significant 'low-hanging fruit' for organic growth. A dietary account typically provides twice the revenue contribution of an environmental services account on a same-store basis.

Healthcare Services (HCSG) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.2 per share. This compares to earnings of $0.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +60.00%. A quarter ago, it was expected that this provider of housekeeping, laundry and dietary services to health care facilities would post earnings of $0.22 per share when it actually produced earnings of $0.37, delivering a surprise of +68.18%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Healthcare Services, which belongs to the Zacks Business - Services industry, posted revenues of $470.81 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.13%. This compares to year-ago revenues of $458.49 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Healthcare Services shares have added about 29.7% since the beginning of the year versus the S&P 500's gain of 9.7%. While Healthcare Services has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Healthcare Services was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.22 on $495 million in revenues for the coming quarter and $1.01 on $1.93 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Business - Services is currently in the bottom 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Willdan Group (WLDN), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This energy efficiency and sustainability consultant is expected to post quarterly earnings of $1.22 per share in its upcoming report, which represents a year-over-year change of -18.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Willdan Group's revenues are expected to be $100.15 million, up 5.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Healthcare Services Group, Inc. (HCSG) : Free Stock Analysis Report Willdan Group, Inc. (WLDN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $470.8 million for Q2 2026. Net Income: $22.7 million. Diluted EPS: $0.32 per share. Cash Flow from Operations: $21.9 million; $27.9 million excluding payroll accrual changes. Environmental Services Revenue: $213.2 million with a margin of 13.3%. Dietary Services Revenue: $257.6 million with a margin of 7.5%. Cost of Services: $396 million or 84.1% of revenue. SG&A Expenses: $52.6 million; $45.7 million after adjustments. Other Income: $8.8 million; $1.9 million after adjustments. Effective Tax Rate: 26.8%. Cash and Marketable Securities: $200.9 million. Share Repurchase: $20.9 million in Q2; $44.9 million year-to-date. Warning! GuruFocus has detected 5 Warning Signs with HCSG. Is HCSG fairly valued? Test your thesis with our free DCF calculator. Release Date: July 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Healthcare Services Group Inc (NASDAQ:HCSG) reported strong Q2 2026 results with revenue of $470.8 million and net income of $22.7 million. The company has a robust pipeline of new business opportunities, indicating strong demand for its services. HCSG's cost of services was well-managed, coming in below the 86% target, benefiting from strong service execution and lower bad debt expense. The company has a strong liquidity position with cash and marketable securities of $200.9 million and an undrawn credit facility of $300 million. HCSG is actively pursuing strategic acquisitions and share repurchases, with $44.9 million of common stock repurchased year-to-date. The company faces ongoing macroeconomic challenges, including volatility in global energy and supply markets due to geopolitical conflicts. Food inflation saw a sequential increase in Q2, marking the first rise after three consecutive quarterly declines. The timing of new business opportunities and client start dates can be fluid, impacting quarterly growth projections. The company's insurance-related actuarial adjustments have been unpredictable, posing challenges for financial modeling. Despite a strong cash position, the impact of recent acquisitions on revenue has been insignificant, indicating a focus on strategic fit over immediate financial gain. Q: Can you comment on the expected top-line performance for the back half of the year, particularly regarding new business opportunities and the factors influencing growth? A: Theodore Wahl, CEO, explained that demand for services remains strong with a robust pipeline of new business opportunities. The growth is influenced by the timing of management capacity and client start date preferences. The pipeline is split evenly between Environmental Services (EVS) and Dietary Services, with dietary accounts typically contributing more revenue. Cross-selling opportunities, particularly in dietary services, remain significant. Q: Have there been any changes in underlying hourly wage rates or food inflation, and how are these costs being managed? A: Matthew McKee, Chief Communications Officer, noted a slight increase in food inflation for the second quarter but highlighted ongoing stabilization in the labor market. Wage inflation has shown a downward trend, and the company has contractual rights to pass through any food and wage inflationary increases to clients. Q: Can you provide more details on the cost of goods sold (COGS) and bad debt expense for the quarter? A: Vikas Singh, CFO, stated that COGS benefited from strong service execution and lower bad debt expense, with bad debt for the quarter at $4.3 million. This is favorable compared to historical averages, contributing positively to cost of sales. The company continues to manage costs effectively despite broader economic inflationary pressures. Q: What is the outlook for cash from operations for the year, and are there any expected Employee Retention Credit (ERC) payments? A: Vikas Singh mentioned that no ERC payments have been received this year, and the timing of any future payments is uncertain. Cash flow modeling is based on maintaining cost structures, with net income serving as a proxy for cash flows. The company expects to manage cash flows effectively without relying on ERC payments. Q: How is the Genesis bankruptcy situation affecting your operations, and what is the status of your business relationship with them? A: Theodore Wahl confirmed that services to Genesis facilities continue without disruption. The bankruptcy court approved the sale of Genesis to a group of well-known operators, with the transaction expected to close in late Q3 or early Q4. The company does not anticipate any operational disruptions during this period. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Healthcare Services Group, Inc.? Here are five stocks we like better. Healthcare Services Group reported Q2 2026 revenue of $470.8 million and net income of $22.7 million, or $0.32 per diluted share, with management pointing to strong execution and solid demand in long-term and post-acute care. The company reaffirmed its 2026 outlook for mid-single-digit revenue growth and expects third-quarter revenue of $475 million to $485 million, while saying its sales pipeline remains robust and customer retention is above 90%. HCSG ended the quarter with $200.9 million in cash and marketable securities, bought back $20.9 million of stock in Q2, and said its M&A pipeline is improving as it continues to pursue organic growth, acquisitions and share repurchases. Cigna Considers Humana Acquisition – What It Means for the Stocks Healthcare Services Group (NASDAQ:HCSG) reported second-quarter 2026 revenue of $470.8 million, with management citing disciplined execution, steady industry fundamentals and continued demand for outsourced services in long-term and post-acute care. Chief Executive Officer Ted Wahl said the company generated net income of $22.7 million, or $0.32 per diluted share, for the three months ended June 30. Cash flow from operations totaled $21.9 million, or $27.9 million excluding a $6 million decrease in payroll accrual. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks Is Cigna Group the Nation's Best-Run Health Insurance Company? “I am pleased with our second quarter results, which underscore the strength of our business model and the continued disciplined execution across our operations,” Wahl said. Chief Communications Officer Matt McKee said Environmental Services revenue was $213.2 million, with segment margin of 13.3%. Dietary Services revenue was $257.6 million, with segment margin of 7.5%. → 3 Photonics Companies Making Quantum Tech Possible Cost of services was $396 million, or 84.1% of revenue. McKee said the line benefited from strong service execution and lower bad debt expense. He said the company’s goal remains managing cost of services in the 86% range. Selling, general and administrative expenses were $52.6 million. Excluding a $6.9 million increase in deferred compensation, SG&A was $45.7 million, or 9.7% of revenue. McKee said Healthcare Services Group aims to manage SG&A in the 9.5% to 10.5% range in the near term, with a longer-term goal of 8.5% to 9.5%. → AI Data Centers Need Power, and These 2 Industrials Are Cashing In Other income was $8.8 million, or $1.9 million after adjusting for the deferred compensation increase. The company reported an effective tax rate of 26.8% and expects its 2026 effective tax rate to be approximately 25%. Healthcare Services Group reaffirmed its 2026 outlook for mid-single-digit revenue growth. McKee said third-quarter revenue is expected to be in the range of $475 million to $485 million. Wahl said the company’s growth priorities for the third quarter include developing management candidates, converting sales pipeline opportunities, retaining existing facility business and pursuing strategic acquisition and investment opportunities. In response to a question from UBS analyst A.J. Rice about the expected ramp in the second half of the year, Wahl said demand for the company’s services “remains as strong as ever” and described the sales pipeline as “robust and growing.” He said the timing of growth depends on Healthcare Services Group’s management capacity and client start-date preferences. Wahl said the company continues to retain more than 90% of its base business. He added that the new business pipeline is “split fairly evenly” between Environmental Services and Dietary Services, although dietary accounts typically contribute about twice the revenue of Environmental Services accounts on a same-store basis. Wahl also noted that Healthcare Services Group is about 50% penetrated in Dietary Services within its Environmental Services customer base, calling the cross-sell opportunity “the ultimate low-hanging fruit from a growth perspective.” Wahl said industry fundamentals continue to strengthen, supported by demographic trends as baby boomers age into the primary utilization cohort for long-term and post-acute care. He also cited steady occupancy, a workforce that has recovered to its pre-pandemic baseline and a stable reimbursement environment. Management said it is monitoring volatility in energy and supply markets tied to geopolitical conflicts. Wahl said the company’s purchasing and procurement teams are surveying the supply chain and working with longstanding vendor partners to manage risk. McKee said food-at-home inflation increased to 1% in the second quarter, marking the first sequential quarter-over-quarter increase after three consecutive quarterly step-downs. On wages, he said the labor market is continuing to stabilize and improve, supporting hiring and retention. He added that the company has contractual rights to pass through food and wage inflation increases to clients. Chief Financial Officer Vikas Singh said Healthcare Services Group ended the quarter with $200.9 million in cash and marketable securities. Its $300 million revolving credit facility was undrawn, with utilization limited to letters of credit. Singh said the company continues to allocate capital across organic growth, mergers and acquisitions, and share repurchases. Healthcare Services Group closed a small strategic acquisition within its campus business during the second quarter. The company repurchased $20.9 million of common stock in the second quarter, bringing year-to-date repurchases to $44.9 million. Singh said Healthcare Services Group has 8.3 million shares remaining under its repurchase authorization. In February, the company announced plans to target $75 million of common stock repurchases over 12 months. Asked about the M&A environment by William Blair’s Matthew Mardula, Singh said the company’s pipeline is more robust than it was six, 12 or 18 months ago. He said the recent campus acquisition was small and strategically focused, with an insignificant revenue contribution in the quarter and subsequent periods. Singh said bad debt expense was $4.3 million in the quarter, compared with $3.8 million in the previous quarter. He said bad debt has been below 1% of revenue for the past two quarters, compared with a historical average of 1% to 1.5%, helped by collections initiatives and contract enhancements. Singh also discussed workers’ compensation and general liability reserve benefits. He said the company recorded a $1.3 million benefit in the second quarter, down from more than $4.5 million in the first quarter. He said the benefit is expected to trend toward zero over time as actuarial reserves reach a steadier state. On Genesis, Wahl said Healthcare Services Group continues to provide services to Genesis facilities without disruption in operations, outcomes or payments. He said the sale of Genesis to 101 West State Street was approved by the bankruptcy court in January and appears on track to close in late third quarter or early fourth quarter. Wahl closed the call by saying the company is entering the second half of 2026, its 50th anniversary year, with “underlying fundamentals” that are “more robust than ever.” 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Healthcare Services Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Delivers Strong Results Reaffirms 2026 Growth Outlook Revenue of $470.8 million. Net income and diluted EPS of $22.7 million and $0.32. Cash flow from operations of $21.9 million; cash flow from operations, excluding the change in payroll accrual, of $27.9 million. Share repurchases of $20.9 million under previously announced $75.0 million, 12-month share repurchase plan. Reaffirms 2026 mid-single-digit growth outlook. BENSALEM, Pa., July 22, 2026--(BUSINESS WIRE)--Healthcare Services Group, Inc. (NASDAQ:HCSG) today reported results for the three months ended June 30, 2026. CEO Commentary Ted Wahl, Chief Executive Officer, stated, "I am pleased with our second quarter results, which underscore the strength of our business model and the continued, disciplined execution across our operations. Looking ahead, we are reaffirming our 2026 mid-single-digit growth outlook, with a focus on realizing the substantial growth opportunities in the second half of the year and beyond." Second Quarter Results Revenue was reported at $470.8 million. Cost of services was reported at $396.0 million or 84.1%. SG&A was reported at $52.6 million. After adjusting for the $6.9 million increase in deferred compensation, SG&A was $45.7 million or 9.7%. Other income was reported at $8.8 million. After adjusting for the $6.9 million increase in deferred compensation, other income was $1.9 million. Effective tax rate was reported at 26.8%. Net income and diluted EPS were reported at $22.7 million and $0.32, respectively. Balance Sheet and Liquidity The Company’s primary sources of liquidity are cash flow from operating activities, cash and cash equivalents, and its revolving credit facility. Cash flow from operations was reported at $21.9 million. After adjusting for the $6.0 million decrease in the payroll accrual, cash flow from operations was $27.9 million. As of the end of the second quarter, the Company had cash and marketable securities of $200.9 million and an unutilized $300.0 million credit facility. Share Repurchases In February 2026, the Company announced its plan to further accelerate the pace of its share buybacks and repurchase $75.0 million of its common stock through January 2027. In the second quarter, the Company repurchased $20.9 million of its common stock. Year-to-date, the Company has purchased $44.9 million of its common stock. The Company has 8.3 million shares remaining under its February 2026 share repurchase authorization. Conference Call and Upcoming Events The Company will host a conference call on Wednesday, July 22, 2026, at 8:30 a.m. Eastern Time to discuss its results for the three months ended June 30, 2026. The call may be accessed via phone at 1 (833) 461-5787, Conference ID: 594377303. The call will be simultaneously webcast under the "Events & Presentations" section of the Investor Relations page on the Company’s website, www.hcsg.com. A replay of the webcast will also be available on the website for one year following the date of the earnings call. The Company will be participating in the RBC Nashville Bus Tour on August 12 in Nashville, TN. The Company will also be attending and presenting at Baird’s Global Healthcare Conference on September 15 in New York, NY. Additionally, the Company will be participating in a Non-Deal Roadshow hosted by Oppenheimer in New York, NY and Boston, MA on September 22 & 23. About Healthcare Services Group, Inc. Healthcare Services Group (NASDAQ: HCSG) is a leader in managing Environmental and Dietary services within the healthcare industry. With 50 years of experience, HCSG aims to provide improved operational, regulatory, and financial outcomes for its clients. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This release and any schedules incorporated by reference into it may contain forward-looking statements within the meaning of federal securities laws, which are not historical facts but rather are based on current expectations, estimates and projections about our business and industry, and our beliefs and assumptions. Words such as "believes," "anticipates," "plans," "expects," "estimates," "will," "goal," "intend" and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by us that any of our plans will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking information is also subject to various risks and uncertainties. Such risks and uncertainties include, but are not limited to, risks arising from our providing services to the healthcare industry and primarily providers of long-term care; credit and collection risks associated with the healthcare industry; the impact of bank failures; our claims experience related to workers’ compensation, general liability and other insurance programs; the effects of changes in, or interpretations of laws and regulations governing the healthcare industry, our workforce and services provided, including state and local regulations pertaining to the taxability of our services and other labor-related matters such as minimum wage increases; the Company's expectations with respect to selling, general, and administrative expense; the impacts of past or future cyber attacks or breaches; global events including ongoing international conflicts and increased energy prices; and the risk factors described in Part I of our Form 10-K for the fiscal year ended December 31, 2025 under "Government Regulation of Customers," "Service Agreements and Collections," and "Competition" and under Item 1A. "Risk Factors" in such Form 10-K. These factors, in addition to delays in payments from customers and/or customers undergoing restructurings, have resulted in, and could continue to result in, significant additional bad debts in the near future. Additionally, our operating results have been in the past and could in the future be adversely affected by continued inflation particularly if increases in the costs of labor and labor-related costs, materials, supplies and equipment used in performing services (including the impact of potential tariffs) cannot be passed on to our customers. In addition, we believe that to improve our financial performance we must continue to obtain service agreements with new customers, retain and provide new services to existing customers, achieve modest price increases on current service agreements with existing customers and/or maintain internal cost reduction strategies at our various operational levels. Furthermore, we believe that our ability to sustain the internal development of managerial personnel is an important factor impacting future operating results and the successful execution of our projected growth strategies. There can be no assurance that we will be successful in that regard. USE OF NON-GAAP FINANCIAL INFORMATION To supplement HCSG’s consolidated financial information, which are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"), the Company believes that certain non-GAAP financial measures are useful in evaluating operating performance and comparing such performance to other companies. The Company is presenting cash flow from operations (excluding the change in payroll accrual), earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA excluding items impacting comparability ("Adjusted EBITDA"). We cannot provide a reconciliation of forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for financial statements prepared in accordance with GAAP. View source version on businesswire.com: https://www.businesswire.com/news/home/20260722089816/en/ Contacts Company Contacts: Theodore WahlPresident and Chief Executive Officer Vikas SinghExecutive Vice President and Chief Financial Officer Matthew J. McKeeChief Communications Officer [email protected]

Concentrix Corporation (CNXC) came out with quarterly earnings of $2.63 per share, missing the Zacks Consensus Estimate of $2.64 per share. This compares to earnings of $2.7 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -0.19%. A quarter ago, it was expected that this company would post earnings of $2.64 per share when it actually produced earnings of $2.61, delivering a surprise of -1.14%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Concentrix, which belongs to the Zacks Business - Services industry, posted revenues of $2.46 billion for the quarter ended May 2026, missing the Zacks Consensus Estimate by 0.43%. This compares to year-ago revenues of $2.42 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Concentrix shares have lost about 39.9% since the beginning of the year versus the S&P 500's gain of 7.4%. While Concentrix has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Concentrix was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.18 on $2.54 billion in revenues for the coming quarter and $11.65 on $10.11 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Business - Services is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Healthcare Services (HCSG), has yet to report results for the quarter ended June 2026. This provider of housekeeping, laundry and dietary services to health care facilities is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of -4.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Healthcare Services' revenues are expected to be $470.2 million, up 2.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Concentrix Corporation (CNXC) : Free Stock Analysis Report Healthcare Services Group, Inc. (HCSG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In recent weeks, Healthcare Services Group has seen analysts lift earnings estimates and maintain a favorable Zacks Rank #2, reflecting improved expectations for its profit outlook. This upswing in analyst confidence, marked by stronger agreement on higher EPS forecasts, underscores shifting perceptions of the company’s earnings resilience relative to its business services peers. Now we’ll examine how this refreshed analyst optimism around earnings estimates interacts with Healthcare Services Group’s existing investment narrative. Invest in the nuclear renaissance through our list of 88 elite nuclear energy infrastructure plays powering the global AI revolution. To own Healthcare Services Group, you need to believe its outsourced housekeeping and dietary model can stay relevant as healthcare facilities wrestle with costs, staffing and regulation. The recent lift in earnings estimates and Zacks Rank #2 supports the near term earnings momentum as a key catalyst, but does not fundamentally change the biggest risk around client concentration and contract stability in a consolidating post-acute care industry. Among recent announcements, the Q1 2026 results stand out in light of this analyst optimism, with sales of US$462.77 million and net income of US$26.06 million. While these figures align with an improving earnings outlook, they sit alongside ongoing concerns around labor cost pressures and reimbursement-dependent customer health, which remain central to how durable any earnings improvement can be over time. Yet beneath the stronger earnings estimates, investors should be aware that concentrated exposure to financially fragile facility operators could still... Read the full narrative on Healthcare Services Group (it's free!) Healthcare Services Group's narrative projects $2.2 billion revenue and $88.9 million earnings by 2029. This requires 5.3% yearly revenue growth and a $21.0 million earnings increase from $67.9 million today. Uncover how Healthcare Services Group's forecasts yield a $26.20 fair value, a 28% upside to its current price. Simply Wall St Community members currently place Healthcare Services Group’s fair value between US$26.20 and about US$32.99 across 2 independent views, reminding you that opinions can vary widely. Set this against the recent analyst earnings upgrades and ask how client concentration and industry consolidation might influence the company’s ability to sustain that improved outlook over time. Explore 2 other fair value estimates on Healthcare Services Group - why the stock might be worth as much as 61% more than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Healthcare Services Group research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free Healthcare Services Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Healthcare Services Group's overall financial health at a glance. Opportunities like this don't last. These are today's most promising picks. Check them out now: AI is about to change healthcare. These 34 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Uncover the next big thing with 25 elite penny stocks that balance risk and reward. The latest GPUs need a type of rare earth metal called Neodymium and there are only 27 companies in the world exploring or producing it. Find the list for free. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HCSG. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Healthcare Services Group reported Q1 revenue of $462.8 million (+3.4%), net income of $26.1 million and diluted EPS of $0.37, with Environmental Services at $208.3 million (12.1% margin) and Dietary Services at $254.5 million (9% margin) and overall cost of services at 83.6% of revenue. The company outperformed its 86% cost-of-services target by about 2%, driven roughly 1% (~$4.7 million) from workers’ compensation/general liability efficiencies and lower bad debt (~$3.8 million), though management cautioned these benefits can be “lumpy.” Management is targeting mid-single-digit revenue growth for FY26 with Q2 guidance of $465–$475 million, expects H2 sequential growth, ended Q1 with $214.6 million in cash and marketable securities, an undrawn $300 million revolver extended to 2031, and returned $24 million in buybacks while announcing a $75 million repurchase program. Interested in Healthcare Services Group, Inc.? Here are five stocks we like better. Cigna Considers Humana Acquisition – What It Means for the Stocks Healthcare Services Group (NASDAQ:HCSG) reported what CEO Ted Wahl described as a “strong” start to fiscal 2026, citing growth in revenue, earnings, and cash flow as new client wins and high retention supported year-over-year gains. Chief Communications Officer Matt McKee said revenue for the first quarter totaled $462.8 million, up 3.4% from the prior year. Environmental Services revenue was $208.3 million with a segment margin of 12.1%, while Dietary Services revenue was $254.5 million with a segment margin of 9%. → Credo Stock Flashes Strong Bullish Signal—Upswing Just Starting Is Cigna Group the Nation's Best-Run Health Insurance Company? McKee said cost of services was $386.9 million, representing 83.6% of revenue. He noted the company’s goal is to manage cost of services in the 86% range, while attributing the quarter’s result to “strong service execution,” efficiencies in workers’ compensation and general liability, and lower bad debt expense. SG&A expense was $42.0 million. McKee said that after adjusting for a $1.6 million decrease in deferred compensation, SG&A was $43.6 million, or 9.4% of revenue. He said the company’s goal is to manage SG&A in a 9.5% to 10.5% range, with a longer-term goal of 8.5% to 9.5%. → Allbirds Exits Shoes, Pivots to AI With NewBird Rebrand Net income was $26.1 million, and diluted earnings per share were $0.37, according to McKee. The effective tax rate was 24.6%, and management expects a full-year 2026 effective tax rate of approximately 25%. During the Q&A, management provided additional detail on the favorable cost-of-services performance. McKee said the “primary driver” of margin consistency is service execution, including customer experience, systems adherence, regulatory compliance, and budget discipline. → Amazon Stock Up 30%: Is AMZN Still a Buy Before Earnings? CFO Vikas Singh quantified the outperformance versus the company’s 86% cost-of-services target. Singh said the company outperformed by about 2%, with roughly 1% tied to workers’ compensation and general liability efficiencies, contributing about $4.7 million favorably in the quarter. Singh cautioned the benefit can be “lumpy” and depends on claim frequency and severity and the actuarial model, meaning it may not repeat at the same level in subsequent quarters. Singh said the remainder of the favorable performance stemmed from bad debt and service execution. He said bad debt expense in the quarter was $3.8 million, “less than 1% of revenue,” compared with recent periods above 2% and a more normalized historical average in the 1% to 1.5% range. Singh also confirmed the quarter included no ERC receipts and no ERC impact to the company’s profit and loss statement. McKee said the company’s 2026 growth plans are oriented around mid-single-digit revenue growth. For the second quarter, he guided to revenue in the range of $465 million to $475 million, and said the company expects sequential revenue growth in the second half of the year compared to the first half. Wahl said the company’s strategic priorities for Q2 remain focused on: Driving growth through management candidate development, converting the sales pipeline, and retaining existing facility business Managing costs through field-based operational execution and prudent enterprise spend management Optimizing cash flow through increased customer payment frequency, enhanced contract terms, and disciplined working capital management Addressing questions about the path to mid-single-digit growth, Wahl said demand for the company’s services is “stronger than it’s ever been” and described the sales pipeline as robust. He said quarter-to-quarter variability is driven largely by timing, specifically “the timing of HCSG management capacity and the timing of client start date preference.” Wahl added that the new business pipeline is split fairly evenly between Environmental Services and Dietary Services, while noting that dietary accounts are typically about 2x the revenue of an Environmental Services account on a same-store basis. He also said the company remains about 50% penetrated in Dietary Services, framing cross-selling dietary to existing Environmental Services customers as “low-hanging fruit.” Singh said operating cash flow was $43.7 million, and $23.4 million after adjusting for a $20.3 million increase in the payroll accrual. The company ended Q1 with $214.6 million in cash and marketable securities, and its $300 million revolving credit facility was undrawn, with utilization limited to letters of credit. Singh also said that on April 7, the company amended its credit agreement to extend the revolver’s maturity to 2031, with a “favorably modified” SOFR-based pricing grid and enhanced covenant flexibility. On capital returns, Wahl said the company returned $24 million through share repurchases during the quarter. Singh said that in February 2026 the company announced plans to repurchase $75 million of common stock over 12 months, and he clarified that only $15.3 million of the quarter’s repurchases occurred after the mid-February program announcement, with the remainder tied to the prior program and regular open-market activity. Singh said management is aiming for a “more uniform cadence” rather than trying to front-load or time the market. He said the company had 9.2 million shares remaining under its current authorization. Wahl also provided an update on Genesis, saying HCSG continues to provide services to Genesis facilities “without operational or payment disruption” and expects that to continue during the post-petition period. He said the bankruptcy court approved the sale of Genesis to 101 West State Street in January, with financing and timing still developing, and he suggested the closing could move later into the summer. 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. The article "Healthcare Services Group Q1 Earnings Call Highlights" was originally published by MarketBeat.

Revenue growth of 3.4% was primarily driven by new client acquisitions and high retention rates, supported by a robust sales pipeline across Environmental and Dietary services. Management attributes the significant margin outperformance to 'operational excellence' in the field, specifically citing improved systems adherence, regulatory compliance, and budget discipline. The industry is entering a multi-decade demographic tailwind as the first baby boomers turn 80 in 2026, which is expected to structurally increase demand for long-term and post-acute care. Workforce availability and steady occupancy rates (around 80%) are currently the primary catalysts for facility-level financial stability and service expansion. Service execution, workers' comp and general liability efficiencies, and lower bad debt expense have driven strong performance in cost of services, and the company's goal is to manage these costs in the 86% range. The company maintains a 'financial steward' role for clients, prioritizing cost mitigation through sourcing pivots if specific food or supply items face outsized price pressure. Management targets mid-single-digit revenue growth for 2026, with Q2 revenue projected between $465 million and $475 million and sequential acceleration in the second half. The long-term margin framework remains anchored at an 86% cost of services target, despite Q1 outperformance, to account for potential lumpiness in insurance and bad debt items. Strategic growth is dependent on the localized development of management candidates; field teams must prove operational proficiency before being permitted to expand their portfolios. The Dietary segment remains a primary growth lever, with only 50% penetration among existing Environmental Services clients representing significant 'low-hanging fruit' for cross-selling. Capital allocation will remain disciplined, focusing on a $75 million share repurchase program over 12 months and pursuing 'land and expand' M&A opportunities in the $20 million to $30 million range. Workers' comp and general liability efficiencies provided a $4.7 million (1%) favorable impact to cost of sales, though management cautioned this is actuarially driven and may not repeat consistently. Bad debt expense was unusually low at less than 1% of revenue due to a lack of client bankruptcies in Q1, compared to a normalized historical range of 1% to 1.5%. The company extended its $300 million revolving credit facility maturity to 2031 with improved pricing and covenant flexibility to support inorganic growth and buybacks. Services to Genesis facilities continue without disruption during its bankruptcy process, with a sale to a new operator group expected to close in early summer, though it will likely be pushed out to later in the summer. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management clarified that while operational execution is strong, approximately 1% of the outperformance came from lumpy workers' comp efficiencies and another portion from lower-than-average bad debt. They reiterated the 86% target for the remainder of the year to maintain a conservative buffer against unpredictable insurance claim frequencies. Growth is strictly gated by local management capacity; districts are not permitted to take on new business unless they meet rigorous service and budget benchmarks in existing facilities. The company currently sees no limitations or obstacles to achieving its growth objectives based on the current management trainee pipeline. The Campus business represented over $100 million in annualized revenue in 2025, and the company is focused on growth objectives and pipeline development for this segment. Inorganic strategy focuses on small, disciplined acquisitions that serve as platforms for organic 'land and expand' growth rather than large-scale consolidations. Management has not observed negative impacts from increased clinical reviews by insurers, noting that occupancy remains stable or trending upward across urban and rural geographies. They emphasized that labor availability remains the most critical factor for occupancy growth, rather than regulatory or payer-driven admission hurdles. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.