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Healthequity
(NASDAQ:HQY)
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Rating:73Outperform
Price Target:
$114.00
▲(9.17% Upside)
Action:Reiterated
Date:09/30/26
The score is supported primarily by strong financial performance (profitability turnaround, expanding margins, and robust free cash flow) and a constructive earnings update with raised FY2027 guidance and continued buybacks. Offsetting these strengths, technicals are notably weak with the stock in a downtrend despite oversold readings, and valuation remains somewhat premium (P/E ~31) without dividend support.
Positive Factors
Profitability and Margin Expansion
The shift from losses to strong net profitability, alongside gross margin near 73%, indicates improved operating economics and meaningful scalability. If maintained, these margins can support reinvestment in the platform, strengthen resilience, and convert revenue growth into durable earnings and cash generation.
Negative Factors
Competitive Service-Fee Pressure
Persistent pricing competition can reduce service revenue per account and force HealthEquity to share efficiency savings with clients rather than retain them as margin. This creates an ongoing challenge to sustaining profitability even as the company expands its account base and operating scale.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and Margin Expansion
The shift from losses to strong net profitability, alongside gross margin near 73%, indicates improved operating economics and meaningful scalability. If maintained, these margins can support reinvestment in the platform, strengthen resilience, and convert revenue growth into durable earnings and cash generation.
Read all positive factors
Healthequity (HQY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.48B
Dividend YieldN/A
Average Volume (3M)857.77K
Price to Earnings (P/E)36.6
Beta (1Y)0.86
Revenue Growth7.33%
EPS Growth65.97%
CountryUS
Employees2,814
SectorHealthcare
Sector Strength45
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)2.80
Shares Outstanding82,715,294
10 Day Avg. Volume759,510
30 Day Avg. Volume857,769
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)3.50
Price to Sales (P/S)5.62
P/FCF Ratio16.21
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue6.73
Enterprise Value/Gross Profit8.95
Enterprise Value/Ebitda18.52
Forecast
1Y Price Target
$121.11Price Target Upside15.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)4.72
Revenue Forecast (FY)$1.42B
Healthequity Business Overview & Revenue Model
Company Description
Headquartered in Draper, Utah, and established in 2002, HealthEquity, Inc. furnishes technology-powered service platforms to both individual consumers and employers across the United States. The company provides cloud-based solutions designed to a...
How the Company Makes Money
HealthEquity primarily makes money through fees for administering and servicing benefit accounts and through income earned on the assets held in those accounts.
1) Service fees (benefits account administration)
- HealthEquity charges administrati...
Healthequity Earnings Call Summary
Earnings Call Date:Aug 27, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 08, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: accelerated revenue growth, record gross profit and adjusted EBITDA margin expansion, raised fiscal 2027 guidance, robust HSA account and asset growth, meaningful digital and AI-driven efficiency gains, and healthy cash generation enabling share repurchases. Key risks and near-term constraints include marketplace revenue still being immaterial, competitive price pressure on service fees, hedging that limits yield upside, modest total account growth outside HSAs, and a small current share of investing HSA members. Overall, the positive execution, raised guidance, and margin durability materially outweigh the noted challenges.Positive Updates
Accelerating Revenue Growth
Total revenue growth accelerated to 8% year-over-year in Q2; first-half revenue $705.4M, up 7% year-over-year. Company raised fiscal 2027 revenue guidance to $1.411B–$1.421B.
Negative Updates
Marketplace Revenue Still Immature
Although showing encouraging early engagement (14,000+ active members), management noted marketplace revenue is currently immaterial to overall financial results and must scale significantly before contributing meaningfully to revenue and profit.
Read all updates
Q2-2027 Updates
Positive
Negative
Accelerating Revenue Growth
Total revenue growth accelerated to 8% year-over-year in Q2; first-half revenue $705.4M, up 7% year-over-year. Company raised fiscal 2027 revenue guidance to $1.411B–$1.421B.
Read all positive updates
Company Guidance
HealthEquity raised its fiscal 2027 outlook, now expecting revenue of $1.411–1.421 billion, GAAP net income of $242–248 million (or $2.88–$2.96 per share), non‑GAAP net income of $392–398 million (or $4.66–$4.73 per share on an estimated 84 million shares), and adjusted EBITDA of $628–636 million; management assumes a GAAP and non‑GAAP tax rate of ~25%. They expect average HSA cash yield of 3.85–3.90% in FY27 and noted $2.3 billion of HSA cash repricing remaining in FY27, $460 million of forward Treasury contracts matured in Q2, $3.0 billion of outstanding forward contracts effectively locking a ~3.9% five‑year Treasury rate (net of costs) across FY27–29, and small forward hedges placed post‑quarter for enhanced‑rate repricings over the next 12–18 months. The company closed the quarter with $256 million of cash, generated $136 million of operating cash flow, had ~$931 million of debt outstanding (net of issuance costs), repurchased about $108 million of shares in Q2 at an average price below $90 and has roughly $948 million remaining under its $1.6 billion repurchase authorization; the guidance reflects continued funding of growth initiatives, planned share repurchases, potential revolver paydowns, and preserved capacity for opportunistic M&A.Healthequity Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.36B | 1.31B | 1.20B | 999.59M | 861.75M | 756.56M |
| Gross Profit | 1.02B | 913.12M | 692.58M | 529.87M | 395.50M | 340.92M |
| EBITDA | 495.07M | 489.22M | 337.54M | 282.42M | 171.53M | 102.97M |
| Net Income | 236.49M | 215.20M | 96.70M | 55.71M | -26.14M | -44.29M |
Balance Sheet | ||||||
| Total Assets | 3.27B | 3.43B | 3.45B | 3.16B | 3.09B | 3.11B |
| Cash, Cash Equivalents and Short-Term Investments | 256.00M | 318.93M | 295.95M | 403.98M | 254.27M | 225.41M |
| Total Debt | 971.02M | 1.00B | 1.11B | 933.14M | 994.49M | 1.01B |
| Total Liabilities | 1.28B | 1.32B | 1.33B | 1.13B | 1.19B | 1.25B |
| Stockholders Equity | 1.99B | 2.11B | 2.11B | 2.04B | 1.90B | 1.85B |
Cash Flow | ||||||
| Free Cash Flow | 471.67M | 455.13M | 337.77M | 196.75M | 31.52M | 3.91M |
| Operating Cash Flow | 490.18M | 457.09M | 339.86M | 242.83M | 150.65M | 141.00M |
| Investing Cash Flow | -59.64M | -47.14M | -505.45M | -46.07M | -119.13M | -639.25M |
| Financing Cash Flow | -479.00M | -386.98M | 57.57M | -47.04M | -2.67M | 394.86M |
Healthequity Technical Analysis
Positive
104.42
Price Trends
95.37
Positive
95.82
Positive
89.01
Positive
Market Momentum
2.46
Negative
66.33
Neutral
72.28
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 104.42 is above the 20-day moving average (MA) of 95.95, above the 50-day MA of 95.37, and above the 200-day MA of 89.01, indicating a bullish trend. The MACD of 2.46 indicates Negative momentum. The RSI at 66.33 is Neutral, neither overbought nor oversold. The STOCH value of 72.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HQY.
Healthequity Risk Analysis
Healthequity disclosed 43 risk factors in its most recent earnings report. Healthequity reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Healthequity Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $8.48B | 36.60 | 11.43% | ― | 7.33% | 65.97% | |
73 Outperform | $5.37B | 38.89 | 3.59% | ― | 19.23% | 44.44% | |
73 Outperform | $9.22B | 84.90 | 30.25% | ― | 49.76% | ― | |
68 Neutral | $1.15B | 275.85 | 1.84% | ― | 47.63% | ― | |
66 Neutral | $1.19B | 66.35 | 2.61% | ― | -1.83% | -48.77% | |
56 Neutral | $1.55B | -9.90 | -11.63% | ― | -2.38% | 32.73% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
HQY
Healthequity
102.47
7.89
8.34%
TDOC
Teladoc
8.51
-0.12
-1.39%
GDRX
GoodRx Holdings
3.49
0.12
3.56%
WAY
Waystar Holding Corp.
28.00
-7.85
-21.90%
HNGE
Hinge Health, Inc. Class A
114.32
64.56
129.74%
OMDA
Omada Health, Inc.
18.73
-5.84
-23.77%
Healthequity Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
HealthEquity Announces Chief Commercial Officer Leadership Change
Neutral
Oct 9, 2026
HealthEquity, Inc. terminated the employment of Chief Commercial Officer Michael Fiore without cause, effective October 5, 2026, and plans to redistribute the CCO’s responsibilities among other members of its management team. Under the terms...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
HealthEquity adds Moody’s CFO Heuland to board
Positive
Sep 30, 2026
On September 24, 2026, HealthEquity appointed Moody’s Corporation Chief Financial Officer Noémie Heuland to its board of directors, expanding the board from ten to eleven members, nine of whom are independent. Heuland will serve on the ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.