NASDAQ:HQY, a strong growth stock, setting up for a breakout.

Last update: Dec 22, 2023

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.

Looking at the Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:HQY boasts a 8 out of 10:

HQY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 69.49%, which is quite impressive.
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 16.81% 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 35.86% 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 14.12% on average per year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

ChartMill's Evaluation of Health

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:

HQY has an Altman-Z score of 3.70. This indicates that HQY is financially healthy and has little risk of bankruptcy at the moment.
HQY has a better Altman-Z score (3.70) than 75.86% of its industry peers.
HQY has a Debt to FCF ratio of 4.96. This is in the better half of the industry: HQY outperforms 67.24% of its industry peers.
HQY has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
HQY's Debt to Equity ratio of 0.44 is fine compared to the rest of the industry. HQY outperforms 61.21% of its industry peers.
HQY has a Current Ratio of 4.93. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.93, HQY belongs to the top of the industry, outperforming 90.52% of the companies in the same industry.
HQY has a Quick Ratio of 4.93. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 4.93, HQY belongs to the best of the industry, outperforming 92.24% of the companies in the same industry.

Profitability Analysis for NASDAQ:HQY

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:HQY scores a 6 out of 10:

HQY has a better Return On Equity (1.47%) than 61.21% of its industry peers.
The last Return On Invested Capital (2.77%) for HQY is above the 3 year average (1.54%), which is a sign of increasing profitability.
HQY's Profit Margin of 3.00% is fine compared to the rest of the industry. HQY outperforms 72.41% of its industry peers.
Looking at the Operating Margin, with a value of 10.84%, HQY belongs to the top of the industry, outperforming 87.07% of the companies in the same industry.
HQY has a better Gross Margin (60.90%) than 83.62% of its industry peers.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:HQY has a 8 as its setup rating:

HQY has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 62.73, a Stop Loss order could be placed below this zone.

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

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

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.