MeritValue

HEALTHCARE SERVICES GROUP INC

HCSGdata completeness 88%18 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

HEALTHCARE SERVICES GROUP INC earns about 11% on invested capital, comfortably above its ~9% cost of capital, and has bought back 3% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $5.6 and $13.07 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.64B1$1.69B2$1.67B3$1.72B3$1.84B3
Net income$48.5M4$34.2M5$38.4M6$39.5M6$59.1M6
Operating cash flow$37.1M7−$8.17M8$43.5M9$30.8M9$145M9
Capital expenditure$5.69M10$5.21M11$5.41M12$6.34M12$5.82M12
Free cash flow (derived)$31.4M7−$13.4M8$38.1M9$24.5M9$139.2M9
Total debt—————
Cash & equivalents$70.8M13$26.3M14$54.3M15$56.8M15$125.2M15
Diluted shares75.0M74.4M74.3M74.0M73.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$69.86
your share of equity
Profit it earned you last year
$8.09
Free cash flow it threw off
$19.05
Debt you’d be carrying
—

10 shares is a claim on $69.86 of net worth that earned you $8.09 and generated $19.05 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
11% avg · 5y
FY21 13%FY22 9%FY23 10%FY24 9%FY25 15%

It earned about 11% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−3% shares · 5y

Share count is down 3% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $5.6 and $13.07 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$13.07
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth6.6%
  • fcfBase$38.1M
DCF · Growth Exit 5Y
$11.63
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth6.6%
  • fcfBase$38.1M
Earnings Power Value
$5.6
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$39.5M
  • growthAssumed0.0%
Graham Number
$11.28
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years6.6%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $11.63
The three cases
Bear0.0%$9.17
Base6.6%$11.63
Bull11.6%$13.92

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 6.6%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000731012-24-000025 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000731012-25-000032 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000731012-26-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000731012-24-000025 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000731012-25-000032 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000731012-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000731012-24-000025 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000731012-25-000032 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000731012-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000731012-24-000025 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000731012-25-000032 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000731012-26-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000731012-25-000032 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  14. 10-K · period ending 2022-12-31 · accession 0000731012-25-000032 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000731012-26-000009 (CashAndCashEquivalentsAtCarryingValue)