Healthcare Services Q2 revenue beats estimates, announces $50 mln buyback

Overview

• Healthcare Services Q2 revenue rises 7.6%, beating analyst expectations

• Net income impacted by Genesis restructuring, resulting in a loss of $32.4 mln

• Company announces $50 mln share repurchase plan over next 12 months

Outlook

• Healthcare Services Group raises 2025 cash flow forecast to $70-85 mln, excluding payroll accrual changes

• Company reiterates 2025 mid-single digit revenue growth expectations

• Healthcare Services Group aims to manage 2025 service costs in 86% range

• Company plans $50 mln share repurchase over next 12 months

Result Drivers

• ORGANIC GROWTH - New client wins and higher retention drove organic growth, per CEO Ted Wahl

• GENESIS IMPACT - $61.2 mln non-cash charge from Genesis restructuring impacted net income

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy."

• Wall Street's median 12-month price target for Healthcare Services Group Inc is $15.00, about 13% above its July 22 closing price of $13.05

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 13 three months ago

Press Release: ID:nBwblnjZMa