Healthequity (HQY)
NASDAQ:HQY
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Healthequity
(NASDAQ:HQY)
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Rating:77Outperform
Price Target:
$94.00
▲(12.66% Upside)
Action:ReiteratedDate:03/31/26
The score is driven primarily by strong financial performance (improving profitability, robust free cash flow, and a cleaner balance-sheet profile) and a constructive earnings outlook with raised FY2027 guidance and margin expansion. These strengths are partially offset by weaker longer-term technical trend signals and a less supportive valuation (P/E ~34 with no dividend yield provided).
Positive Factors
Strong cash generation
Consistently large operating and free cash flow provides durable financial flexibility: funds capital returns, debt paydown, and reinvestment. High cash conversion reduces reliance on external financing and supports long-term strategic initiatives and margin resilience.
Negative Factors
Under‑monetized HSA base
Low member utilization and investment penetration limit per-account revenue upside and slow organic yield growth. Converting this underused base requires sustained engagement and product changes, so monetization gains may be gradual and execution‑sensitive.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistently large operating and free cash flow provides durable financial flexibility: funds capital returns, debt paydown, and reinvestment. High cash conversion reduces reliance on external financing and supports long-term strategic initiatives and margin resilience.
Read all positive factors
Healthequity (HQY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.05B
Dividend YieldN/A
Average Volume (3M)923.23K
Price to Earnings (P/E)34.3
Beta (1Y)0.92
Revenue Growth12.20%
EPS Growth98.75%
CountryUS
Employees3,105
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.95
Shares Outstanding84,478,410
10 Day Avg. Volume912,981
30 Day Avg. Volume923,231
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)3.50
Price to Sales (P/S)5.62
P/FCF Ratio16.21
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue5.95
Enterprise Value/Gross Profit8.55
Enterprise Value/Ebitda24.22
Forecast
1Y Price Target
$109.42Price Target Upside31.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)4.62
Revenue Forecast (FY)$1.41B
Healthequity Business Overview & Revenue Model
Company Description
HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, compare...
How the Company Makes Money
HealthEquity makes money primarily by administering health-related financial accounts and earning fees and financial income tied to balances held in those accounts. Key revenue streams include: (1) Service revenue: recurring account-based and empl...
Healthequity Earnings Call Summary
Earnings Call Date:Mar 17, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jun 08, 2026
Earnings Call Sentiment Positive
The call emphasized strong operating leverage, significant margin expansion, record sales, higher assets, robust cash generation, and proactive hedging—while acknowledging early-stage initiatives (marketplace, ACA retail cohort) and structural underutilization of HSAs that create both risk and opportunity. Management raised guidance for fiscal 2027 and highlighted AI, security gains, and policy tailwinds as durable growth drivers. The positive financial momentum and multiple strategic initiatives outweigh the near-term execution and market uncertainties.Positive Updates
Record HSA Sales and Account Growth
Added a record 550,000 HSAs in Q4 and more than 1,000,000 new HSAs from sales for the full fiscal year; total accounts reached 17,800,000.
Negative Updates
Modest Service Revenue Growth
Service revenue grew only 2% year-over-year in Q4 to $127.1M, indicating slower growth in fee-for-service lines relative to custodial revenue and overall company growth.
Read all updates
Q4-2026 Updates
Positive
Negative
Record HSA Sales and Account Growth
Added a record 550,000 HSAs in Q4 and more than 1,000,000 new HSAs from sales for the full fiscal year; total accounts reached 17,800,000.
Read all positive updates
Company Guidance
HealthEquity raised fiscal 2027 guidance to revenue of $1,405–$1,415 million; GAAP net income of $239–$246 million (EPS $2.78–$2.85); non‑GAAP net income of $392–$400 million (non‑GAAP EPS $4.56–$4.65) based on an estimated 86 million diluted shares; and adjusted EBITDA of $618–$628 million. The outlook assumes a ~3.8% average yield on HSA cash (versus a 3.53% yield at FY26 year‑end), GAAP and non‑GAAP tax rates of 25%, continued capital returns (≈$178 million remaining on the repurchase authorization) and possible additional revolver paydowns; at year‑end the company had $319 million cash, ~$957 million debt outstanding, generated $457 million of operating cash flow in FY26, repurchased >$300 million of stock in FY26 (≈$82 million in Q4), and held ~$2.4 billion notional forward rate locks at a blended 3.92% (maturities through Jan‑2028).Healthequity Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
90
Very Positive
| Breakdown | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.31B | 1.20B | 999.59M | 861.75M | 756.56M |
| Gross Profit | 913.12M | 692.58M | 529.87M | 395.50M | 340.92M |
| EBITDA | 322.46M | 337.54M | 282.42M | 171.53M | 102.97M |
| Net Income | 215.20M | 96.70M | 55.71M | -26.14M | -44.29M |
Balance Sheet | |||||
| Total Assets | 3.43B | 3.45B | 3.16B | 3.09B | 3.11B |
| Cash, Cash Equivalents and Short-Term Investments | 318.93M | 295.95M | 403.98M | 254.27M | 225.41M |
| Total Debt | 1.00B | 1.11B | 933.14M | 994.49M | 1.01B |
| Total Liabilities | 1.32B | 1.33B | 1.13B | 1.19B | 1.25B |
| Stockholders Equity | 2.11B | 2.11B | 2.04B | 1.90B | 1.85B |
Cash Flow | |||||
| Free Cash Flow | 455.13M | 337.77M | 196.75M | 31.52M | 3.91M |
| Operating Cash Flow | 457.09M | 339.86M | 242.83M | 150.65M | 141.00M |
| Investing Cash Flow | -47.14M | -505.45M | -46.07M | -119.13M | -639.25M |
| Financing Cash Flow | -386.98M | 57.57M | -47.04M | -2.67M | 394.86M |
Healthequity Technical Analysis
Positive
83.44
Price Trends
80.09
Positive
87.79
Negative
91.17
Negative
Market Momentum
1.07
Negative
57.20
Neutral
79.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HQY, the sentiment is Positive. The current price of 83.44 is above the 20-day moving average (MA) of 81.03, above the 50-day MA of 80.09, and below the 200-day MA of 91.17, indicating a neutral trend. The MACD of 1.07 indicates Negative momentum. The RSI at 57.20 is Neutral, neither overbought nor oversold. The STOCH value of 79.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HQY.
Healthequity Risk Analysis
Healthequity disclosed 41 risk factors in its most recent earnings report. Healthequity reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Healthequity Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.05B | 34.29 | 10.11% | ― | 12.20% | 98.75% | |
71 Outperform | $4.26B | 33.71 | 22.89% | ― | 20.21% | 44.14% | |
70 Outperform | $8.42B | 39.79 | 10.71% | ― | 17.23% | ― | |
64 Neutral | $3.09B | -6.96 | -132.16% | ― | 50.67% | -578.00% | |
54 Neutral | $1.55B | -251.31 | 0.17% | ― | 10.67% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
HQY
Healthequity
83.44
3.08
3.83%
OMCL
Omnicell
34.11
2.51
7.94%
DOCS
Doximity
23.06
-29.33
-55.98%
BTSG
BrightSpring Health Services, Inc.
43.51
26.23
151.79%
HNGE
Hinge Health, Inc. Class A
39.19
-0.97
-2.42%
Healthequity Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
HealthEquity Adds Sanford Health CEO Bill Gassen to Board
Positive
Mar 30, 2026
On March 26, 2026, HealthEquity appointed William “Bill” Gassen, president and chief executive officer of Sanford Health, to its board of directors, expanding the board from nine to ten members, eight of whom are independent. Gassen wi...
Business Operations and StrategyFinancial Disclosures
HealthEquity Issues Confident Fiscal 2027 Outlook and Guidance
Positive
Jan 12, 2026
On January 12, 2026, HealthEquity issued its initial outlook for the fiscal year ending January 31, 2027, projecting revenues between $1.38 billion and $1.41 billion, an adjusted EBITDA margin of 43.8% to 44.3%, and an expected yield of about 3.75...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.