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

In this article, we'll take a closer look at HEALTHEQUITY INC (NASDAQ:HQY) as a potential candidate for growth investing. While it's important for investors to conduct their own research, HEALTHEQUITY INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

Evaluating Growth: NASDAQ:HQY

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:HQY was assigned a score of 8 for growth:

• The Earnings Per Share has grown by an impressive 62.03% over the past year.
• The Earnings Per Share has been growing by 13.50% on average over the past years. This is quite good.
• Looking at the last year, HQY shows a quite strong growth in Revenue. The Revenue has grown by 15.80% in the last year.
• HQY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 28.33% yearly.
• The Earnings Per Share is expected to grow by 24.36% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 13.19% on average over the next years. This is quite good.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

A Closer Look at Health for NASDAQ:HQY

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:HQY, the assigned 6 for health provides valuable insights:

• HQY has an Altman-Z score of 4.43. This indicates that HQY is financially healthy and has little risk of bankruptcy at the moment.
• HQY's Altman-Z score of 4.43 is amongst the best of the industry. HQY outperforms 84.96% of its industry peers.
• A Debt/Equity ratio of 0.44 indicates that HQY is not too dependend on debt financing.
• HQY has a Debt to Equity ratio of 0.44. This is in the better half of the industry: HQY outperforms 62.83% of its industry peers.
• HQY has a Current Ratio of 4.39. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
• HQY has a better Current ratio (4.39) than 91.15% of its industry peers.
• HQY has a Quick Ratio of 4.39. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Quick ratio, with a value of 4.39, HQY belongs to the top of the industry, outperforming 92.92% of the companies in the same industry.

Looking at the Profitability

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 Return On Assets of 2.48%. This is in the better half of the industry: HQY outperforms 69.03% of its industry peers.
• The Return On Equity of HQY (3.83%) is better than 69.91% of its industry peers.
• The 3 year average ROIC (1.69%) for HQY is below the current ROIC(3.42%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 7.72%, HQY belongs to the best of the industry, outperforming 92.04% of the companies in the same industry.
• The Operating Margin of HQY (13.92%) is better than 91.15% of its industry peers.
• Looking at the Gross Margin, with a value of 63.48%, HQY belongs to the top of the industry, outperforming 85.84% of the companies in the same industry.

How do we evaluate the setup 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. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 81.79, 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.

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

Check the latest full technical report of HQY for a complete technical analysis.

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.