Healthcare Services Group (NASDAQ:HCSG) Could Be At Risk Of Shrinking As A Company

Simply Wall St.12-22 20:26

To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging. More often than not, we'll see a declining return on capital employed (...

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More often than not, we'll see a declining return on capital employed (...</p>\n\n<a href=\"https://finance.yahoo.com/news/healthcare-services-group-nasdaq-hcsg-122650069.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"QID","symbol_name":"纳指两倍做空ETF","start_time":0,"source_url":"https://finance.yahoo.com/news/healthcare-services-group-nasdaq-hcsg-122650069.html","article_id":"2493246536","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/ZOQCmyATlYtp8ZaAQnvOpA--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/3906216b8cfc9ed88e06b5e462760ad6"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2493246536","pubTimestamp":1734870410,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging. More often than not, we'll see a declining return on capital employed  and a declining amount of capital employed. Trends like this ultimately mean the business is reducing its investments and also earning less on what it has invested. So after we looked into Healthcare Services Group , the trends above didn't look too great.Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income  a company earns on the capital invested in its business. To calculate this metric for Healthcare Services Group, this is the formula:. So, Healthcare Services Group has an ROCE of 9.8%.  On its own, that's a low figure but it's around the 11% average generated by the Commercial Services industry.While Healthcare Services Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid b","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"QID":"纳指两倍做空ETF","BK4588":"碎股","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H",".IXIC":"NASDAQ Composite","TSYW.SI":"TESLA 3xLongSG261006","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","TQQQ":"纳指三倍做多ETF","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","PSQ":"纳指反向ETF","BK4112":"金融交易所和数据","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","QLD":"纳指两倍做多ETF","NVIW.SI":"NVDA 3xLongSG261006","BK4137":"综合支持服务","HCSG":"医疗保健服务","USJW.SI":"ALPHAB 3xLongSG261006","SQQQ":"纳指三倍做空ETF","BK4585":"ETF&股票定投概念","NDAQ":"纳斯达克OMX交易所","HCAR":"Healthcare Services Acquisition Corp","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","USAW.SI":"AMZN 3xLongSG261006","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD"},"translate_title":"医疗保健服务集团（纳斯达克：HCSG）作为一家公司可能面临萎缩的风险","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"EBIT":1,"HCAR":1,"HCSG":1,".IXIC":1,"NDAQ":1,"USJW.SI":0.6,"USAW.SI":0.6,"TSYW.SI":0.6,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NVIW.SI":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications of aging. More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed. Trends like this ultimately mean the business is reducing its investments and also earning less on what it has invested. So after we looked into Healthcare Services Group (NASDAQ:HCSG), the trends above didn't look too great. \n Understanding Return On Capital Employed (ROCE) \n Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Healthcare Services Group, this is the formula: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.098 = US$60m ÷ (US$806m - US$197m) (Based on the trailing twelve months to September 2024).\n So, Healthcare Services Group has an ROCE of 9.8%.  On its own, that's a low figure but it's around the 11% average generated by the Commercial Services industry. \n View our latest analysis for Healthcare Services Group \n\n\n\n  NasdaqGS:HCSG Return on Capital Employed December 22nd 2024\n \n\n Above you can see how the current ROCE for Healthcare Services Group compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Healthcare Services Group  for free. \n What The Trend Of ROCE Can Tell Us \n We are a bit worried about the trend of returns on capital at Healthcare Services Group. To be more specific, the ROCE was 16% five years ago, but since then it has dropped noticeably. Meanwhile, capital employed in the business has stayed roughly the flat over the period. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on Healthcare Services Group becoming one if things continue as they have. \n Our Take On Healthcare Services Group's ROCE \n All in all, the lower returns from the same amount of capital employed aren't exactly signs of a compounding machine. Long term shareholders who've owned the stock over the last five years have experienced a 47% depreciation in their investment, so it appears the market might not like these trends either. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere. \n If you're still interested in Healthcare Services Group it's worth checking out our  FREE intrinsic value approximation for HCSG  to see if it's trading at an attractive price in other respects. \n While Healthcare Services Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2493246536"}