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Strength Seen in HealthEquity (HQY): Can Its 3.5% Jump Turn into More Strength?
HealthEquity (HQY - Free Report) shares soared 3.5% in the last trading session to close at $102.40. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.9% gain over the past four weeks.
The sharp upsurge in HQY shares can be attributed to positive market sentiment surrounding its strong recent financial performance and sustained strength in its business model . The company has shown impressive growth, with a year-to-date returns of 55%. Investors seem to be optimistic about HealthEquity’s ongoing earnings and revenue growth, which have been consistent and also likely to reflect in the upcoming results as well.
This provider of services for managing health care accounts is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of +18.3%. Revenues are expected to be $290.48 million, up 16.6% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For HealthEquity, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HQY going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
HealthEquity is part of the Zacks Medical Services industry. Embecta Corp. (EMBC - Free Report) , another stock in the same industry, closed the last trading session 1.4% lower at $14.42. EMBC has returned 7.2% in the past month.
For Embecta Corp., the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.40. This represents a change of -32.2% from what the company reported a year ago. Embecta Corp. currently has a Zacks Rank of #3 (Hold).