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

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.

Evaluating Growth: NASDAQ:HQY

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:HQY scores 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.
• 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.
• The Revenue has been growing by 28.33% 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 24.36% on average per year.
• HQY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.19% yearly.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Health Assessment of NASDAQ:HQY

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:HQY, the assigned 6 reflects its health status:

• An Altman-Z score of 4.13 indicates that HQY is not in any danger for bankruptcy at the moment.
• HQY has a better Altman-Z score (4.13) than 81.74% of its industry peers.
• A Debt/Equity ratio of 0.44 indicates that HQY is not too dependend on debt financing.
• HQY has a better Debt to Equity ratio (0.44) than 60.87% of its industry peers.
• A Current Ratio of 4.39 indicates that HQY has no problem at all paying its short term obligations.
• Looking at the Current ratio, with a value of 4.39, HQY belongs to the top of the industry, outperforming 93.91% of the companies in the same industry.
• 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.
• The Quick ratio of HQY (4.39) is better than 93.91% of its industry peers.

Profitability Analysis for NASDAQ:HQY

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 6 is a significant indicator of profitability:

• HQY's Return On Assets of 2.48% is fine compared to the rest of the industry. HQY outperforms 68.70% of its industry peers.
• HQY has a Return On Equity of 3.83%. This is in the better half of the industry: HQY outperforms 68.70% of its industry peers.
• The last Return On Invested Capital (3.42%) for HQY is above the 3 year average (1.70%), which is a sign of increasing profitability.
• The Profit Margin of HQY (7.71%) is better than 92.17% of its industry peers.
• HQY's Operating Margin of 13.93% is amongst the best of the industry. HQY outperforms 90.43% of its industry peers.
• The Gross Margin of HQY (63.48%) is better than 86.09% of its industry peers.

How does the Setup look 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 7 as its setup rating, indicating its current consolidation status.

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 72.25, 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.

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.