Why NASDAQ:HQY Is a Promising High-Growth Stock in the Midst of Consolidation.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether HEALTHEQUITY INC (NASDAQ:HQY) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but HEALTHEQUITY INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

Unpacking NASDAQ:HQY's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:HQY has received 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.
• The Revenue has been growing by 30.29% on average over the past years. This is a very strong growth!
• Based on estimates for the next years, HQY will show a very strong growth in Earnings Per Share. The EPS will grow by 33.71% on average per year.
• The Revenue is expected to grow by 13.28% on average over the next years. This is quite good.
• 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.

Deciphering NASDAQ:HQY's Health Rating

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:HQY has achieved a 7 out of 10:

• An Altman-Z score of 3.93 indicates that HQY is not in any danger for bankruptcy at the moment.
• With a decent Altman-Z score value of 3.93, HQY is doing good in the industry, outperforming 79.13% of the companies in the same industry.
• Looking at the Debt to FCF ratio, with a value of 5.17, HQY is in the better half of the industry, outperforming 66.09% of the companies in the same industry.
• HQY has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
• HQY has a better Debt to Equity ratio (0.45) than 62.61% 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.
• With an excellent Current ratio value of 4.09, HQY belongs to the best of the industry, outperforming 89.57% of the companies in the same industry.
• A Quick Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a better Quick ratio (4.09) than 89.57% of its industry peers.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:HQY, the assigned 5 is a significant indicator of profitability:

• The last Return On Invested Capital (2.23%) for HQY is above the 3 year average (1.54%), which is a sign of increasing profitability.
• HQY's Profit Margin of 1.37% is fine compared to the rest of the industry. HQY outperforms 61.74% of its industry peers.
• HQY has a Operating Margin of 8.93%. This is amongst the best in the industry. HQY outperforms 83.48% of its industry peers.
• With an excellent Gross Margin value of 59.69%, HQY belongs to the best of the industry, outperforming 81.74% of the companies in the same industry.

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 only a medium technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 75.59. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 71.62, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

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.