Healthequity (HQY) AI Stock Analysis

• Market Cap: $8.27B
• Dividend Yield: N/A
• Average Volume (3M): 887.09K
• Price to Earnings (P/E): 44.4
• Beta (1Y): 0.86
• Revenue Growth: 12.20%
• EPS Growth: 98.75%
• Country: US
• Employees: 3,105
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 1.01
• Shares Outstanding: 85,436,290
• 10 Day Avg. Volume: 1,135,467
• 30 Day Avg. Volume: 887,094
• PEG Ratio: 1.40
• Price to Book (P/B): 4.54
• Price to Sales (P/S): 7.99
• P/FCF Ratio: 28.40
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 6.93
• Enterprise Value/Gross Profit: 10.23
• Enterprise Value/Ebitda: 21.34
• 1Y Price Target: $119.40
• Price Target Upside: 23.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 3.94
• Revenue Forecast (FY): $1.31B

• Rating: 76 Outperform
• Price Target: $111.00 ▲(14.68% Upside)

HealthEquity's strong financial performance and positive earnings call are the primary drivers of its stock score. The company's robust growth metrics and strategic initiatives position it well for future success. However, the high P/E ratio suggests overvaluation, and technical indicators show neutral momentum, which tempers the overall score.

Positive Factors

Strong Financial Growth

The significant increase in revenue, net income, and EBITDA reflects robust operational performance, indicating strong market demand and effective cost management, which supports long-term growth potential.

HSA and Account Growth

The growth in HSA accounts and assets enhances the company's market position and revenue base, providing a stable foundation for future expansion and increased customer engagement.

Positive Legislative Environment

Supportive legislative developments could expand the market for HSAs, aligning with HealthEquity's mission and potentially driving further growth in account adoption and revenue.

Negative Factors

Macro Environment Challenges

Economic uncertainties may hinder new member acquisition, impacting growth prospects. A weak labor market could reduce the number of potential HSA participants, affecting long-term revenue growth.

Potential Pricing Pressure

Pricing pressures could compress margins and affect revenue from premium account types, challenging the company's ability to maintain profitability in competitive segments.

Equity Utilization

While financial stability is strong, optimizing equity utilization is crucial for sustaining growth. Inefficient use of equity could limit the company's ability to invest in future opportunities and maintain competitive advantages.

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 treatment options and prices, receive personalized benefit and clinical information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides mutual fund investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. The company was incorporated in 2002 and is headquartered in Draper, Utah.

How the Company Makes Money

Healthequity generates revenue through a variety of channels, primarily from account administration fees, investment income, and interchange fees associated with the use of debit cards linked to HSAs. The company charges employers and individuals for managing their health savings accounts, which includes providing online tools, customer service, and compliance support. Additionally, Healthequity earns income from the interest on cash balances held in HSA accounts and from investment management fees when account holders choose to invest their funds in various investment options. Partnerships with employers, insurance carriers, and third-party administrators also significantly contribute to its earnings by expanding its customer base and enhancing the value of its offerings in the competitive healthcare market.

Healthequity Financial Statement Overview

Summary

Healthequity exhibits a strong financial position with impressive revenue growth, profitability, and cash flow generation. The significant reduction in debt enhances financial stability, while robust margins and cash flow ratios indicate efficient operations. The company is well-positioned for continued growth, though it should maintain focus on optimizing equity utilization to sustain its positive trajectory.

Income Statement

Healthequity has demonstrated strong revenue growth with a TTM increase of 1.71% and consistent improvement over the past years. The company maintains robust profitability with a gross profit margin of 67.72% and a net profit margin of 14.86% in the TTM. EBIT and EBITDA margins are also healthy at 17.36% and 32.47%, respectively, indicating efficient operations. Overall, the income statement reflects a positive growth trajectory and strong profitability.

Balance Sheet

The balance sheet shows a significant reduction in debt, with a TTM debt-to-equity ratio of 0.02, down from 0.52 in the previous year, indicating improved financial stability. Return on equity has increased to 6.85%, reflecting better utilization of equity. The equity ratio remains strong, suggesting a solid capital structure. However, the company should continue to monitor its equity utilization to sustain growth.

Cash Flow

Cash flow analysis reveals a substantial increase in free cash flow growth at 17.70% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 3.44, showing efficient conversion of income to cash. The free cash flow to net income ratio is high at 0.96, suggesting effective cash management. Overall, the cash flow statement reflects strong liquidity and operational efficiency.

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

Healthequity Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 96.79
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 96.79 is below the 20-day moving average (MA) of 99.77, above the 50-day MA of 96.38, and above the 200-day MA of 94.95, indicating a neutral trend. The MACD of -0.58 indicates Positive momentum. The RSI at 47.53 is Neutral, neither overbought nor oversold. The STOCH value of 41.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HQY.

Healthequity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HQY	76 Outperform	$8.27B	44.36	9.01%	―	12.20%	98.75%
DOCS	72 Outperform	$8.26B	34.98	24.61%	―	20.21%	44.14%
OMCL	71 Outperform	$1.97B	102.86	1.62%	―	10.67%	―
HNGE	70 Outperform	$3.91B	-9.05	―	―	50.67%	-578.00%
BTSG	67 Neutral	$6.59B	61.00	4.25%	―	17.23%	―
PINC	59 Neutral	$2.34B	-103.21	0.42%	2.97%	-21.26%	-119.34%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Healthequity Corporate Events

HealthEquity Inc. Reports Strong Q2 Earnings and Growth

HealthEquity Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges in the macroeconomic environment. The company showcased strong financial performance, legislative victories for Health Savings Accounts (HSAs), and technological advancements, all contributing to an optimistic outlook.

HealthEquity, Inc. Reports Strong Q2 Financial Results

HealthEquity, Inc. is a leading provider of health savings accounts (HSAs) and other consumer-directed benefits, partnering with employers and health plan providers to empower healthcare consumers with financial tools and resources.