We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Reasons to Hold HealthEquity Stock in Your Portfolio for Now
Read MoreHide Full Article
Key Takeaways
HealthEquity's total HSAs rose 9% to 9.9 million, with assets up 15% to $31.3 billion year over year.
AI and mobile-first strategies boosted efficiency, engagement, and interchange revenue.
Q1 results beat expectations, with margins improving and fraud costs down to $3 million.
HealthEquity, Inc. (HQY - Free Report) has been gaining from its business model and strategy. The optimism, led by a solid first-quarter fiscal 2025 performance and strength in Health Savings Accounts (HSAs), is expected to contribute further. However, data security threats are major concerns.
In the year-to-date period, the Zacks Rank #3 (Hold) company’s shares have declined 7% compared with a 4% decline of the industry. The S&P 500 has increased 9.5% during the said time frame.
The renowned provider of technology-enabled services platforms for healthcare savings and spending decisions has a market capitalization of $8.04 billion. The company projects 20.8% growth over the next five years and expects to witness continued improvements in its business. HealthEquity’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 12.41%.
Reasons Favoring HQY’s Growth
Expansion of Health Savings Accounts: HealthEquity has experienced significant growth in its HSA offerings. As of April 30, 2025, the total number of HSAs for which HealthEquity served as a non-bank custodian was 9.9 million, up 9% year over year. HealthEquity reported 770,000 HSAs with investments as of April 30, 2025, up 16% year over year. Total accounts, as of April 30, 2025, were 17.1 million, up 6.9% year over year. This uptick included total HSAs and 7.2 million CDBs, up 4.3% year over year.
Total HSA assets were $31.3 billion at the end of April 30, 2025, up 15% year over year. This included $17.1 billion of HSA cash (up 7.5% year over year) and $14.2 billion of HSA investments (up 24.6% year over year). Deposits held on behalf of HealthEquity’s clients to facilitate the administration of its CDBs, from which the company generates custodial revenues, were $0.9 billion as of April 30, 2025.
AI & Digital Innovation Drive Scalable Efficiency: HQY’s strategic focus on AI and mobile-first experiences is accelerating growth and margin expansion. In the fiscal first quarter, the company advanced its AI-driven claims adjudication system for real-time, human-free processing, improving efficiency and member satisfaction. AI chat support is reducing call volume while catering to digital-native users, and a shift to secure, app-based access, with over 1.2 million downloads and mandatory multifactor authentication by fall 2025, enhances user trust. New features like mobile-based brokerage investing and digital wallet integration deepen daily engagement, boosting interchange revenue and strengthening long-term loyalty and profitability.
Decent Q1 Results: HealthEquity delivered better-than-expected first-quarter fiscal 2026 results, driven by strong top-and bottom-line growth, robust HSA expansion with 150,000 new accounts, and a notable rise in total HSA assets. The company saw significant operating and gross margin improvements, maintained solid enterprise pipeline momentum despite macro headwinds, and reduced fraud-related costs sharply from $11 million in the prior quarter to $3 million in the first quarter of fiscal 2026.
Image Source: Zacks Investment Research
A Factor That May Offset HQY’s Gains
Data Security Threats: HealthEquity deals with a high level of sensitive personal data and information. Therefore, its ability to ensure the security of its technology platforms and thus sensitive customer and partner information is critical to its operations. Any form of security breach might result in the loss of sensitive information, theft or loss of actual funds, litigation and the performance of indemnity obligations to customers. Any consequent legal claims or proceedings could disrupt HealthEquity’s operations, damage its reputation and cause a loss of confidence in the company’s products and services, thereby adversely affecting its business.
Estimate Trend
HealthEquity has been witnessing a positive estimate revision trend for fiscal 2026. Over the past 60 days, the Zacks Consensus Estimate for earnings per share (EPS) has moved 3 cents upward to $3.73.
The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is pegged at $318.8 million, implying a 6.3% rise from the year-ago reported number. The consensus mark for fiscal second-quarter EPS is pinned at 92 cents, implying a 6.9% improvement year over year.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. (MEDP - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Medpace Holdings, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2025 EPS of $3.10, beating the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).
Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Reasons to Hold HealthEquity Stock in Your Portfolio for Now
Key Takeaways
HealthEquity, Inc. (HQY - Free Report) has been gaining from its business model and strategy. The optimism, led by a solid first-quarter fiscal 2025 performance and strength in Health Savings Accounts (HSAs), is expected to contribute further. However, data security threats are major concerns.
In the year-to-date period, the Zacks Rank #3 (Hold) company’s shares have declined 7% compared with a 4% decline of the industry. The S&P 500 has increased 9.5% during the said time frame.
The renowned provider of technology-enabled services platforms for healthcare savings and spending decisions has a market capitalization of $8.04 billion. The company projects 20.8% growth over the next five years and expects to witness continued improvements in its business. HealthEquity’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 12.41%.
Reasons Favoring HQY’s Growth
Expansion of Health Savings Accounts: HealthEquity has experienced significant growth in its HSA offerings. As of April 30, 2025, the total number of HSAs for which HealthEquity served as a non-bank custodian was 9.9 million, up 9% year over year. HealthEquity reported 770,000 HSAs with investments as of April 30, 2025, up 16% year over year. Total accounts, as of April 30, 2025, were 17.1 million, up 6.9% year over year. This uptick included total HSAs and 7.2 million CDBs, up 4.3% year over year.
Total HSA assets were $31.3 billion at the end of April 30, 2025, up 15% year over year. This included $17.1 billion of HSA cash (up 7.5% year over year) and $14.2 billion of HSA investments (up 24.6% year over year). Deposits held on behalf of HealthEquity’s clients to facilitate the administration of its CDBs, from which the company generates custodial revenues, were $0.9 billion as of April 30, 2025.
AI & Digital Innovation Drive Scalable Efficiency: HQY’s strategic focus on AI and mobile-first experiences is accelerating growth and margin expansion. In the fiscal first quarter, the company advanced its AI-driven claims adjudication system for real-time, human-free processing, improving efficiency and member satisfaction. AI chat support is reducing call volume while catering to digital-native users, and a shift to secure, app-based access, with over 1.2 million downloads and mandatory multifactor authentication by fall 2025, enhances user trust. New features like mobile-based brokerage investing and digital wallet integration deepen daily engagement, boosting interchange revenue and strengthening long-term loyalty and profitability.
Decent Q1 Results: HealthEquity delivered better-than-expected first-quarter fiscal 2026 results, driven by strong top-and bottom-line growth, robust HSA expansion with 150,000 new accounts, and a notable rise in total HSA assets. The company saw significant operating and gross margin improvements, maintained solid enterprise pipeline momentum despite macro headwinds, and reduced fraud-related costs sharply from $11 million in the prior quarter to $3 million in the first quarter of fiscal 2026.
Image Source: Zacks Investment Research
A Factor That May Offset HQY’s Gains
Data Security Threats: HealthEquity deals with a high level of sensitive personal data and information. Therefore, its ability to ensure the security of its technology platforms and thus sensitive customer and partner information is critical to its operations. Any form of security breach might result in the loss of sensitive information, theft or loss of actual funds, litigation and the performance of indemnity obligations to customers. Any consequent legal claims or proceedings could disrupt HealthEquity’s operations, damage its reputation and cause a loss of confidence in the company’s products and services, thereby adversely affecting its business.
Estimate Trend
HealthEquity has been witnessing a positive estimate revision trend for fiscal 2026. Over the past 60 days, the Zacks Consensus Estimate for earnings per share (EPS) has moved 3 cents upward to $3.73.
The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is pegged at $318.8 million, implying a 6.3% rise from the year-ago reported number. The consensus mark for fiscal second-quarter EPS is pinned at 92 cents, implying a 6.9% improvement year over year.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. (MEDP - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
Medpace Holdings, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2025 EPS of $3.10, beating the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).
Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.