HCSG - Healthcare Services slumps 10% on Q2 top and bottom line miss

• Healthcare Services ( NASDAQ: HCSG ) witness a 10% decline in share price post Q2 earnings with revenue of $424.86M, up 6.7% Y/Y misses consensus by $2.36M.
• Bifurcating: housekeeping & laundry and dining & nutrition segment revenues of $199.1M and $225.8M; and margins were 9.0% and 4.5% respectively.
• Direct cost of services was reported at $379.4M, or 89.3%; company remains on track to meet its goal of exiting the year with cost of services in line with its historical target of 86%.
• Company expects 2022 SG&A to ~~8.5% to 9.5%.
• CFO was $9M and was impacted by a $31.6M increase in accounts receivable, primarily related to the timing of cash collections, offset, in part, by a $19.4M increase in accrued payroll.
• GAAP EPS of $0.09 misses consensus by $0.04 .
• Current quarter dividend stands at $0.2138
• Contributor commentary, 'Healthcare Services Group is finally showing some improvement on its top line after years of declines.'
• Stock has a quant rating of Hold with 3.32 score ; lowest marks given to growth.
• Sell-side analyst rating of Hold and has a average price target $19.42.

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