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TheStreet Open House
Healthcare Services Group Inc
HCSG : NASDAQ : Services
$28.71 0.07 | 0.24%
Today's Range: 28.43 - 28.74
Avg. Daily Volume: 348,100
09/23/14 - 2:46 PM ET

Financial Analysis


HEALTHCARE SERVICES GROUP's gross profit margin for the second quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. HEALTHCARE SERVICES GROUP is extremely liquid. Currently, the Quick Ratio is 2.85 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 23.95% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)319.3273.6
EBITDA ($mil)23.0620.99
EBIT ($mil)21.2419.64
Net Income ($mil)13.9212.93


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)68.3785.19
Total Assets ($mil)441.22355.41
Total Debt ($mil)0.00.0
Equity ($mil)301.85243.52


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin14.1914.75
EBITDA Margin7.227.67
Operating Margin6.657.18
Sales Turnover2.83.09
Return on Assets10.8314.68
Return on Equity15.8321.43
Debt Q2 FY14 Q2 FY13
Current Ratio3.333.84
Debt/Capital0.00.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)70.3168.51
Div / share0.170.17
EPS0.20.19
Book value / share4.293.55
Institutional Own % n/a n/a
Avg Daily Volume348192.0339747.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 66.16 for the Commercial Services & Supplies industry and a significant premium compared to the S&P 500 average of 19.94. For additional comparison, its price-to-book ratio of 6.60 indicates a significant premium versus the S&P 500 average of 2.76 and a significant premium versus the industry average of 3.93. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, HEALTHCARE SERVICES GROUP seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HCSG 41.04 Peers 66.16   HCSG 60.72 Peers 13.59

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HCSG is trading at a significant discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HCSG is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HCSG 26.97 Peers 22.35   HCSG 1.45 Peers 3.64

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

HCSG is trading at a significant premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HCSG trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HCSG 6.60 Peers 3.93   HCSG -10.39 Peers 103.74

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HCSG is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HCSG is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HCSG 1.61 Peers 2.03   HCSG 12.45 Peers 27.34

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HCSG is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HCSG significantly trails its peers on the basis of sales growth

 

 

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