Why NASDAQ:HQY Is a Standout High-Growth Stock in a Consolidation Phase.

Last update: Oct 10, 2023

In this article we will dive into HEALTHEQUITY INC (NASDAQ:HQY) as a possible candidate for growth investing. Investors should always do their own research, but we noticed HEALTHEQUITY INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Deciphering NASDAQ:HQY's Growth Rating

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:HQY has achieved a 8 out of 10:

The Earnings Per Share has grown by an impressive 54.78% over the past year.
Measured over the past years, HQY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.71% on average per year.
Looking at the last year, HQY shows a quite strong growth in Revenue. The Revenue has grown by 17.97% in the last year.
HQY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.29% yearly.
Based on estimates for the next years, HQY will show a very strong growth in Earnings Per Share. The EPS will grow by 33.64% on average per year.
Based on estimates for the next years, HQY will show a quite strong growth in Revenue. The Revenue will grow by 12.65% on average per year.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Unpacking NASDAQ:HQY's Health Rating

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:HQY has received a 7 out of 10:

HQY has an Altman-Z score of 4.01. This indicates that HQY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HQY (4.01) is better than 79.82% of its industry peers.
HQY has a better Debt to FCF ratio (5.17) than 66.67% of its industry peers.
HQY has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
HQY's Debt to Equity ratio of 0.45 is fine compared to the rest of the industry. HQY outperforms 63.16% of its industry peers.
HQY has a Current Ratio of 4.09. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
HQY has a Current ratio of 4.09. This is amongst the best in the industry. HQY outperforms 89.47% of its industry peers.
A Quick Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
HQY has a Quick ratio of 4.09. This is amongst the best in the industry. HQY outperforms 89.47% of its industry peers.

Assessing Profitability for NASDAQ:HQY

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:HQY was assigned a score of 5 for profitability:

The 3 year average ROIC (1.54%) for HQY is below the current ROIC(2.23%), indicating increased profibility in the last year.
HQY has a better Profit Margin (1.37%) than 61.40% of its industry peers.
HQY's Operating Margin of 8.93% is amongst the best of the industry. HQY outperforms 83.33% of its industry peers.
The Gross Margin of HQY (59.69%) is better than 81.58% of its industry peers.

How does the Setup look for NASDAQ:HQY

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NASDAQ:HQY currently holds a 8 as its setup rating, suggesting a particular level of consolidation in the stock.

HQY has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price. There is a support zone below the current price at 71.00, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of HQY contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of HQY

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.