We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain HealthEquity (HQY) Stock for Now
Read MoreHide Full Article
HealthEquity, Inc. (HQY - Free Report) is well-poised for growth in the coming quarters, courtesy of its unique investment platform. The optimism led by a solid third-quarter fiscal 2023 performance and strength in Health Savings Accounts (HSA) also buoy optimism on the stock. However, data security issues and a tough competitive landscape are major downsides.
Over the past year, the Zacks Rank #3 (Hold) stock has gained 24.9% against the 24% decline of the industry and 13.4% fall of the S&P 500.
The renowned provider of technology-enabled services platforms for healthcare savings and spending decisions has a market capitalization of $5.13 billion. The company projects 26.3% growth for the next five years and expects to witness continued improvements in its business. HealthEquity’s earnings yield of 2.2% is favorable to the industry’s negative yield.
Image Source: Zacks Investment Research
Let’s delve deeper.
Unique Investment Platform: We are optimistic about HealthEquity’s multiple cloud-based platforms, accessed by its members online via a desktop or mobile device. Individuals can make health-saving and spending decisions, and pay healthcare bills, among other activities, via these platforms. These platforms provide users access to services HealthEquity provides as well as services provided by third parties selected by HealthEquity or its Network Partners. Among other features, HealthEquity’s HSA platform has the capability to provide users with medical bills upon adjudication by a health plan, including details such as the amount paid by insurance.
Strength in HSA: HealthEquity’s total number of HSAs as of Oct 31, 2022 rose 22.6% year over year. HealthEquity’s reported sales of new HSAs in the fiscal third quarter were up 12.6% year over year. Total Active HSA assets at the end of the reported quarter increased 22.9% year over year. Total Accounts, as of Oct 31, 2022, were up 8.8% year over year. This uptick included total HSAs and 6.8 million other Consumer Direct Benefits (CDB).
Strong Q3 Results: HealthEquity saw solid top-line and bottom-line performances in the reported quarter. The top line benefited from robust contributions from all of its revenue sources. Solid growth in HSAs also drove the top line. The gross margin expansion also bodes well.
Downsides
Stiff Competition: HealthEquity faces stiff competition in the Medical Services market, which is rapidly evolving and fragmented. The company’s success depends to a substantial extent on the willingness of consumers to increase their use of HSAs and other CDBs, and its ability to increase engagement and demonstrate the value of its services to existing and potential clients, Network Partners and members.
Data Security Issues: HealthEquity deals with a high level of sensitive personal data and information. Any security breaches might result in the loss of sensitive information, theft or loss of actual funds, litigation or indemnity obligations to the customers. The company’s ability to ensure the security of its technology platforms and, thus, sensitive customer and partner information is critical to its operations.
Estimate Trend
HealthEquity has been witnessing a positive estimate revision trend for fiscal 2023. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 3.1% north to $1.32.
The Zacks Consensus Estimate for fourth-quarter fiscal 2023 revenues is pegged at $226.5 million, suggesting an 11.4% rise from the year-ago reported number.
This compares to our fiscal fourth-quarter revenue estimate of $222.5 million, suggesting a 9.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
AMN Healthcare has gained 5.4% against the industry’s 24% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3%.
Cardinal Health has gained 46.8% against the industry’s 2.3% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 25.6% against the industry’s 2.3% decline over the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Retain HealthEquity (HQY) Stock for Now
HealthEquity, Inc. (HQY - Free Report) is well-poised for growth in the coming quarters, courtesy of its unique investment platform. The optimism led by a solid third-quarter fiscal 2023 performance and strength in Health Savings Accounts (HSA) also buoy optimism on the stock. However, data security issues and a tough competitive landscape are major downsides.
Over the past year, the Zacks Rank #3 (Hold) stock has gained 24.9% against the 24% decline of the industry and 13.4% fall of the S&P 500.
The renowned provider of technology-enabled services platforms for healthcare savings and spending decisions has a market capitalization of $5.13 billion. The company projects 26.3% growth for the next five years and expects to witness continued improvements in its business. HealthEquity’s earnings yield of 2.2% is favorable to the industry’s negative yield.
Image Source: Zacks Investment Research
Let’s delve deeper.
Unique Investment Platform: We are optimistic about HealthEquity’s multiple cloud-based platforms, accessed by its members online via a desktop or mobile device. Individuals can make health-saving and spending decisions, and pay healthcare bills, among other activities, via these platforms. These platforms provide users access to services HealthEquity provides as well as services provided by third parties selected by HealthEquity or its Network Partners. Among other features, HealthEquity’s HSA platform has the capability to provide users with medical bills upon adjudication by a health plan, including details such as the amount paid by insurance.
Strength in HSA: HealthEquity’s total number of HSAs as of Oct 31, 2022 rose 22.6% year over year. HealthEquity’s reported sales of new HSAs in the fiscal third quarter were up 12.6% year over year. Total Active HSA assets at the end of the reported quarter increased 22.9% year over year. Total Accounts, as of Oct 31, 2022, were up 8.8% year over year. This uptick included total HSAs and 6.8 million other Consumer Direct Benefits (CDB).
Strong Q3 Results: HealthEquity saw solid top-line and bottom-line performances in the reported quarter. The top line benefited from robust contributions from all of its revenue sources. Solid growth in HSAs also drove the top line. The gross margin expansion also bodes well.
Downsides
Stiff Competition: HealthEquity faces stiff competition in the Medical Services market, which is rapidly evolving and fragmented. The company’s success depends to a substantial extent on the willingness of consumers to increase their use of HSAs and other CDBs, and its ability to increase engagement and demonstrate the value of its services to existing and potential clients, Network Partners and members.
Data Security Issues: HealthEquity deals with a high level of sensitive personal data and information. Any security breaches might result in the loss of sensitive information, theft or loss of actual funds, litigation or indemnity obligations to the customers. The company’s ability to ensure the security of its technology platforms and, thus, sensitive customer and partner information is critical to its operations.
Estimate Trend
HealthEquity has been witnessing a positive estimate revision trend for fiscal 2023. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has moved 3.1% north to $1.32.
The Zacks Consensus Estimate for fourth-quarter fiscal 2023 revenues is pegged at $226.5 million, suggesting an 11.4% rise from the year-ago reported number.
This compares to our fiscal fourth-quarter revenue estimate of $222.5 million, suggesting a 9.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has gained 5.4% against the industry’s 24% decline in the past year.
Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.7%. CAH’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3%.
Cardinal Health has gained 46.8% against the industry’s 2.3% decline over the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 25.6% against the industry’s 2.3% decline over the past year.