Healthequity (HQY) AI Stock Analysis

• Market Cap: $7.78B
• Dividend Yield: N/A
• Average Volume (3M): 875.86K
• Price to Earnings (P/E): 64.8
• Beta (1Y): 0.67
• Revenue Growth: 19.21%
• EPS Growth: 50.06%
• Country: US
• Employees: 3,105
• Sector: Healthcare
• Sector Strength: 48
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 0.97
• Shares Outstanding: 86,475,350
• 10 Day Avg. Volume: 790,156
• 30 Day Avg. Volume: 875,861
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 6.76
• Enterprise Value/Gross Profit: 10.72
• Enterprise Value/Ebitda: 22.12
• 1Y Price Target: $120.14
• Price Target Upside: 33.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 69 Neutral
• Price Target: $98.00 ▲(9.11% Upside)

Healthequity's strong financial performance and positive earnings call are significant strengths, contributing to a solid overall score. However, bearish technical indicators and a high P/E ratio suggest caution. The stock buyback program adds a positive note, but the overall outlook is tempered by valuation concerns and technical weaknesses.

Positive Factors

Financial Performance

HealthEquity reported financial results that topped expectations and full-year guidance was raised.

Legislation Impact

The revised Senate bill reinstates provisions allowing Bronze & Catastrophic plans to qualify as HDHPs for HSAs, unlocking a 5MM+ member TAM.

Revenue Growth

Total revenue increased 15.0% to $330.8 million, driven by robust custodial revenue growth.

Negative Factors

Legislative Challenges

The draft of the Senate Bill lacks any reference to HSAs, cooling sentiment on HQY as legislative TAM unlock returns to the back-burner.

Macroeconomic Environment

Account growth was relatively weak in the quarter, reflecting a general saturation of HSA adoption and a weaker macro environment.

Market Sentiment

Sentiment has cooled recently, as HQY shares dropped significantly while the S&P saw a slight increase, suggesting market anticipated the HSA omission in Senate's version of the bill.

Healthequity Business Overview & Revenue Model

Company Description

Healthequity (HQY) is a leading provider of health savings account (HSA) solutions and a prominent player in the healthcare financial technology sector. The company specializes in administering HSAs, flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs), enabling individuals and employers to manage healthcare costs more effectively. Healthequity's platform offers a range of services, including account management, investment options, and user-friendly interfaces that facilitate seamless transactions and financial planning for healthcare expenses.

How the Company Makes Money

Healthequity generates revenue through multiple key streams. Primarily, the company earns fees from account holders, which include monthly maintenance fees, transaction fees, and investment fees for those who choose to invest their HSA balances. Additionally, Healthequity collaborates with employers and third-party administrators, providing them with customized HSA and benefits solutions, for which it charges service fees. The company also benefits from interest income generated on the cash balances held in HSAs. Significant partnerships with employers, insurance companies, and financial institutions bolster its client base and enhance its service offerings, contributing to its overall earnings.

Healthequity Financial Statement Overview

Summary

Healthequity demonstrates strong financial performance with significant revenue growth and improved profitability. The balance sheet is stable with moderate leverage, and cash flows are healthy, reflecting efficient operations and effective cash management.

Income Statement

Healthequity shows a strong financial performance with significant revenue growth and improved profitability. Gross Profit Margin is robust at 63.0%, and Net Profit Margin has improved to 9.8% in the TTM period. Revenue growth is impressive, with a 24.1% increase from the previous year. The EBIT Margin is healthy at 16.5%, and the EBITDA Margin is solid at 30.5%, reflecting efficient operations.

Balance Sheet

The balance sheet of Healthequity is stable with a reasonable Debt-to-Equity Ratio of 0.52, indicating moderate leverage. The Return on Equity (ROE) has improved significantly to 5.7%, showing effective utilization of equity. The Equity Ratio is strong at 62.2%, highlighting a solid equity base. However, total debt levels have increased slightly, which should be monitored for future stability.

Cash Flow

Cash flow analysis reveals strong operational cash generation with an Operating Cash Flow to Net Income Ratio of 2.78, indicating robust cash conversion. The Free Cash Flow Growth Rate is healthy at 158.6% from the previous period, and the Free Cash Flow to Net Income Ratio is 0.72, showing effective cash management. Despite a high capital expenditure, free cash flow remains positive.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.24B	1.20B	999.59M	861.75M	756.56M	733.57M
Gross Profit	783.45M	777.26M	622.64M	490.09M	423.71M	415.33M
EBITDA	379.70M	337.54M	282.42M	171.53M	102.97M	154.93M
Net Income	121.81M	96.70M	55.71M	-26.14M	-44.29M	8.83M
Balance Sheet
Total Assets	3.42B	3.45B	3.16B	3.09B	3.11B	2.71B
Cash, Cash Equivalents and Short-Term Investments	287.89M	295.95M	403.98M	254.27M	225.41M	328.80M
Total Debt	1.11B	1.11B	933.14M	994.49M	1.01B	1.07B
Total Liabilities	1.29B	1.33B	1.13B	1.19B	1.25B	1.33B
Stockholders Equity	2.12B	2.11B	2.04B	1.90B	1.85B	1.38B
Cash Flow
Free Cash Flow	87.52M	337.77M	196.75M	31.52M	3.91M	84.66M
Operating Cash Flow	339.17M	339.86M	242.83M	150.65M	141.00M	181.62M
Investing Cash Flow	-251.65M	-505.45M	-46.07M	-119.13M	-639.25M	-96.96M
Financing Cash Flow	-50.85M	57.57M	-47.04M	-2.67M	394.86M	52.42M

Healthequity Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 89.82
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HQY, the sentiment is Negative. The current price of 89.82 is below the 20-day moving average (MA) of 91.89, below the 50-day MA of 96.97, and below the 200-day MA of 97.83, indicating a bearish trend. The MACD of -2.08 indicates Negative momentum. The RSI at 41.62 is Neutral, neither overbought nor oversold. The STOCH value of 40.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HQY.

Healthequity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCS	80 Outperform	$11.92B	55.25	24.25%	―	19.45%	46.46%
PGNY	76 Outperform	$1.99B	39.95	10.94%	―	9.62%	-6.61%
HQY	69 Neutral	$7.78B	64.81	5.77%	―	19.21%	50.06%
GDRX	66 Neutral	$1.62B	47.09	5.27%	―	3.20%	―
PINC	61 Neutral	$2.11B	116.01	3.56%	3.29%	-24.79%	-78.38%
Sector *	51 Neutral	$7.82B	-0.16	-39.78%	2.19%	21.38%	-1.56%
TDOC	47 Neutral	$1.30B	―	-14.18%	―	-2.57%	79.86%

Healthequity Corporate Events

Healthequity Announces New $300 Million Stock Buyback

On June 26, 2025, Healthequity held its Annual Meeting where stockholders approved all three proposals, including the election of nine directors and the ratification of PricewaterhouseCoopers LLP as the independent accounting firm. Additionally, the board authorized a new $300 million stock repurchase program, supplementing the previous program, allowing the company to repurchase shares under favorable market conditions.