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HealthEquity (HQY) Q4 Earnings and Revenues Beat Estimates
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HealthEquity Inc (HQY - Free Report) reported earnings of 7 cents per share in the fourth quarter of 2016, higher than the Zacks Consensus Estimate of 5 cents. Also, the figure was higher than year-ago earnings of 5 cents on revenue and margin expansion.
Stock Performance
The price performance of the stock has been favorable over the last three months. HealthEquity rose 6.70% while the Zacks classified Medical Services sub-industry declined almost 1.26%.
Quarter Details
Revenues came in at $46.8 million, reflecting an increase of 30% year over year. Revenues also surpassed the Zacks Consensus Estimate of $45.0 million. Service (44% of total revenues), Custodial (34%) and Interchange (22%) revenues were up 21%, 44% and 33% year over year, respectively.
The growth in service revenues were driven by year-over-year increase in average health savings account (HAS), offset by a decrease in service revenue per average HSA. The decline was led by the company’s strategy of offering lower service fees per HSA for more volume from network partners, particularly with higher balances. HealthEquity stated that the profitability of an HSA in this business model increases as balances grow.
The growth in Custodial revenues was supported by higher average daily cash AUM. The strong year-over-year growth in Interchange revenues was driven by increased card spending and more favorable interchange terms (higher spend volume).
As of Jan 31, 2017, total number of HSA members – for which the company serves as a non-bank custodian – increased 28% year over year to 2.7 million. Total assets under management (AUM) surged 37% year over year to $5.0 billion.
Financial Condition
As of Jan 31, 2017, the company had $180.4 million of cash, cash equivalents and marketable securities and no outstanding debt. This compares favorably to $123.8 million in cash, cash equivalents and marketable securities and no outstanding debt as of Jan 31, 2016.
Guidance
For fiscal 2018 (ending Jan 31, 2018), HealthEquity forecasts revenues in the range of $220–$225 million. Net income is forecasted in the range of $30.0 million to $34.0 million, resulting in a net income per diluted share range of 50 cents to 55 cents. Adjusted EBITDA outlook is estimated in the band of $77.0 million to $82.0 million. The business outlook for the fiscal ending Jan 31, 2018 assumes a projected effective income tax rate of approximately 37%.
Zacks Rank and Key Picks
Currently, HealthEquity has a Zacks Rank #3 (Hold).
Inogen has a long-term expected earnings growth rate of 17.05%. Notably, the stock represents an impressive one-year return of 82%.
Avinger projects sales growth of 30.6% for the current year. Additionally, the company has a projected EPS growth rate of 39.53% for the current fiscal.
Fluidigm has a long-term expected earnings growth rate of 25%. The stock posted a positive earnings surprise of 1.6% in the last reported quarter.
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HealthEquity (HQY) Q4 Earnings and Revenues Beat Estimates
HealthEquity Inc (HQY - Free Report) reported earnings of 7 cents per share in the fourth quarter of 2016, higher than the Zacks Consensus Estimate of 5 cents. Also, the figure was higher than year-ago earnings of 5 cents on revenue and margin expansion.
Stock Performance
The price performance of the stock has been favorable over the last three months. HealthEquity rose 6.70% while the Zacks classified Medical Services sub-industry declined almost 1.26%.
Quarter Details
Revenues came in at $46.8 million, reflecting an increase of 30% year over year. Revenues also surpassed the Zacks Consensus Estimate of $45.0 million. Service (44% of total revenues), Custodial (34%) and Interchange (22%) revenues were up 21%, 44% and 33% year over year, respectively.
The growth in service revenues were driven by year-over-year increase in average health savings account (HAS), offset by a decrease in service revenue per average HSA. The decline was led by the company’s strategy of offering lower service fees per HSA for more volume from network partners, particularly with higher balances. HealthEquity stated that the profitability of an HSA in this business model increases as balances grow.
The growth in Custodial revenues was supported by higher average daily cash AUM. The strong year-over-year growth in Interchange revenues was driven by increased card spending and more favorable interchange terms (higher spend volume).
As of Jan 31, 2017, total number of HSA members – for which the company serves as a non-bank custodian – increased 28% year over year to 2.7 million. Total assets under management (AUM) surged 37% year over year to $5.0 billion.
Financial Condition
As of Jan 31, 2017, the company had $180.4 million of cash, cash equivalents and marketable securities and no outstanding debt. This compares favorably to $123.8 million in cash, cash equivalents and marketable securities and no outstanding debt as of Jan 31, 2016.
Guidance
For fiscal 2018 (ending Jan 31, 2018), HealthEquity forecasts revenues in the range of $220–$225 million. Net income is forecasted in the range of $30.0 million to $34.0 million, resulting in a net income per diluted share range of 50 cents to 55 cents. Adjusted EBITDA outlook is estimated in the band of $77.0 million to $82.0 million. The business outlook for the fiscal ending Jan 31, 2018 assumes a projected effective income tax rate of approximately 37%.
Zacks Rank and Key Picks
Currently, HealthEquity has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical sector include Inogen Inc. (INGN - Free Report) , Avinger, Inc. (AVGR - Free Report) and Fluidigm Corporation . Notably, Inogen sports a Zacks Rank #1 (Strong Buy) while Fluidigm and Avinger carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen has a long-term expected earnings growth rate of 17.05%. Notably, the stock represents an impressive one-year return of 82%.
Avinger projects sales growth of 30.6% for the current year. Additionally, the company has a projected EPS growth rate of 39.53% for the current fiscal.
Fluidigm has a long-term expected earnings growth rate of 25%. The stock posted a positive earnings surprise of 1.6% in the last reported quarter.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>