Is Healthcare Services Group, Inc. overvalued or undervalued?

As of 10 September 2025, the valuation grade for Healthcare Services Group, Inc. has moved from fair to very expensive, indicating a shift towards overvaluation. The company is deemed overvalued based on its P/E ratio of 25, which is significantly higher than its peers such as OPENLANE, Inc. with a P/E of 23.96 and PagSeguro Digital Ltd. with a P/E of 8.20. Additionally, the EV to EBITDA ratio stands at 13.84, which also exceeds the industry benchmarks, further supporting the overvaluation assessment.
In terms of performance, Healthcare Services Group, Inc. has shown a year-to-date return of 37.67%, which outpaces the S&P 500's return of 12.22% during the same period. However, over a longer horizon, the stock has underperformed with a 5-year return of -27.97% compared to the S&P 500's 96.61%, highlighting potential concerns regarding its sustainability at current valuation levels. Overall, the combination of high valuation ratios and mixed performance trends suggests that the company is overvalued.