22% Upside Seen In Healthcare Services Group, Baird Initiates At Outperform
Baird expects Healthcare Services Group, Inc. (NASDAQ: HCSG) to gain from rapid demand for long-term and post-acute care backed by a strong management that tasted success in the past. Therefore, the stock is termed as a secular growth one inside the health services sector.
Analysts Andrew Wittmann, Justin Hauke and Steven Pawlak initiated the stock with an Outperform anda price tag of $46 implying approximately 22 percent upside potentials from Thursday's close.
"While certainly appreciated across traditional valuation metrics, we see runway for continued mid-teens compounding earnings growth over the intermediate term, supplementing a consistent dividend (~2% yield) and offering one of the best risk-adjusted revenue growth stories across our coverage list with our rating catered to long-term holders," the analysts said in a note.
The brokerage pointed out the company achieved a CAGR of 13 percent in respect of revenue and 10 percent as far as EPS is concerned since 2008. Since the formation, the company delivered consistent growth. The lead analyst thinks there is enough room for the company to continue double-digit growth.
Baird sees the growth getting restricted due to lack of talent availability.
The brokerage pointed out that the company has no debt and see a compelling free cash flow and ROIC resulting in a growing dividend.
Analysts are confident a solid portfolio is good for those wanting to invest in the stock on a long-term basis as the risk is relatively lower.
Latest Ratings for HCSG
Sep 2016 | Baird | Initiates Coverage on | Outperform | |
Oct 2015 | Stifel | Maintains | Buy | |
Jul 2015 | Stifel | Maintains | Buy |
View More Analyst Ratings for HCSG
View the Latest Analyst Ratings
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