Jefferies Raises Price Target on Healthcare Services Group (HCSG) to $41 Following 2Q

July 13, 2016 8:36 AM EDT
Get Alerts HCSG Hot Sheet
Price: $17.36 +1.34%

Rating Summary:
    2 Buy, 7 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 12 | Down: 18 | New: 23
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Jefferies reiterated a Hold rating on Healthcare Services Group (NASDAQ: HCSG), and raised the price target to $41.00 (from $36.00), following the company's 2Q earnings report. Initially, all of the $70M of new business signed in 4Q15 was expected to be implemented in 1Q16, meaning 2Q16 revenue would be up sequentially just on the full run-rate of revenue alone. However, implementation of 1/3rd of facilities took 30-60 days longer than anticipated due to some client-driven delays.

Analyst Sean Dodge commented, "Client-driven implementation delays during 1Q/2Q pressured both 2Q revenue and GM. The good news is, as of June (per management), all is back on track and performing as expected. Further, the company expects sales and implementation activity during 2H16 will be sufficient to drive full year revenue growth into the (low) double-digits. Revenue growth through 1H16 was 8.6%, so only a slight acceleration is needed. And 2H comps do get easier."

For an analyst ratings summary and ratings history on Healthcare Services Group click here. For more ratings news on Healthcare Services Group click here.

Shares of Healthcare Services Group closed at $41.94 yesterday.



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