HCSG
Healthcare Services Group, Inc.
$24.01
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 54.7% above fair value
You pay
$24.01
Bear
$12.43
Fair
$15.52
Bull
$18.63
Bear
$12.43
-48.2%
$0.82 × 12x P/E
Fair
$15.52
-35.3%
$0.82 × 15x P/E
Bull
$18.63
-22.4%
$0.82 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
29.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $25.25 from 15 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $15.52 per share.
Warnings
The company pays out 105% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $25.25 (from 15 analysts). Our estimate is 51% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples