Exploring the Growth Potential of NASDAQ:HQY as It Nears a Breakout.

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.

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:

• HQY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 62.03%, 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 13.50% on average per year.
• 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.
• HQY is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 27.75% yearly.
• HQY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.29% yearly.
• 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.

A Closer Look at Health for NASDAQ:HQY

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 6 out of 10:

• An Altman-Z score of 4.30 indicates that HQY is not in any danger for bankruptcy at the moment.
• HQY has a Altman-Z score of 4.30. This is amongst the best in the industry. HQY outperforms 82.76% of its industry peers.
• A Debt/Equity ratio of 0.44 indicates that HQY is not too dependend on debt financing.
• 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 4.39. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
• HQY has a Current ratio of 4.39. This is amongst the best in the industry. HQY outperforms 92.24% of its industry peers.
• A Quick Ratio of 4.39 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a Quick ratio of 4.39. This is amongst the best in the industry. HQY outperforms 93.97% of its industry peers.

Understanding NASDAQ:HQY's Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:HQY has earned a 6 out of 10:

• The Return On Assets of HQY (2.48%) is better than 68.10% of its industry peers.
• HQY has a Return On Equity of 3.83%. This is in the better half of the industry: HQY outperforms 68.97% of its industry peers.
• The 3 year average ROIC (1.70%) for HQY is below the current ROIC(3.42%), indicating increased profibility in the last year.
• HQY has a better Profit Margin (7.71%) than 91.38% of its industry peers.
• With an excellent Operating Margin value of 13.93%, HQY belongs to the best of the industry, outperforming 91.38% of the companies in the same industry.
• HQY has a Gross Margin of 63.48%. This is amongst the best in the industry. HQY outperforms 86.21% of its industry peers.

How do we evaluate the setup for NASDAQ:HQY?

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

Although the technical rating is bad, HQY does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 75.58, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for HQY in the last couple of days, which is a good sign.

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.