Have you been paying attention to shares of Healthcare Services (HCSG)? Shares have been on the move with the stock up 18% over the past month. The stock hit a new 52-week high of $24.52 in the previous session. Healthcare Services has gained 27.1% since the start of the year compared to the -11% move for the Zacks Business Services sector and the -16.1% return for the Zacks Business - Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 22, 2026, Healthcare Services reported EPS of $0.37 versus consensus estimate of $0.22.
For the current fiscal year, Healthcare Services is expected to post earnings of $1.01 per share on $1.93 in revenues. This represents a -8.18% change in EPS on a 4.89% change in revenues. For the next fiscal year, the company is expected to earn $1.08 per share on $2.03 in revenues. This represents a year-over-year change of 6.93% and 5.35%, respectively.
Valuation Metrics
While Healthcare Services has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Healthcare Services has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 24.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 16.4X. On a trailing cash flow basis, the stock currently trades at 17.6X versus its peer group's average of 11.1X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making Healthcare Services an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Healthcare Services currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Healthcare Services fits the bill. Thus, it seems as though Healthcare Services shares could have potential in the weeks and months to come.
How Does HCSG Stack Up to the Competition?
Shares of HCSG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is SPS Commerce, Inc. (SPSC). SPSC has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. SPS Commerce, Inc. beat our consensus estimate by 13.40%, and for the current fiscal year, SPSC is expected to post earnings of $4.73 per share on revenue of $797.99 million.
Shares of SPS Commerce, Inc. have gained 3.7% over the past month, and currently trade at a forward P/E of 12.45X and a P/CF of 12.35X.
The Business - Services industry is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HCSG and SPSC, even beyond their own solid fundamental situation.
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Healthcare Services Group, Inc. (HCSG): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).