NASDAQ:HQY—Positioned as a High-Growth Stock, Ready for a Potential 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.

Understanding NASDAQ:HQY's Growth

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:

• HQY shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 53.50%, which is quite impressive.
• HQY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.50% yearly.
• The Revenue has grown by 18.47% in the past year. This is quite good.
• The Revenue has been growing by 28.33% on average over the past years. This is a very strong growth!
• HQY is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.93% yearly.
• The Revenue is expected to grow by 14.73% 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.

Understanding NASDAQ:HQY's Health Score

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:HQY has received a 6 out of 10:

• 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.
• Looking at the Altman-Z score, with a value of 4.43, HQY belongs to the top of the industry, outperforming 82.86% of the companies in the same industry.
• HQY has a Current Ratio of 3.20. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
• HQY has a Current ratio of 3.20. This is amongst the best in the industry. HQY outperforms 88.57% of its industry peers.
• A Quick Ratio of 3.20 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a better Quick ratio (3.20) than 88.57% of its industry peers.

What does the Profitability looks like for NASDAQ:HQY

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:HQY has achieved a 6:

• HQY has a better Return On Assets (2.77%) than 67.62% of its industry peers.
• HQY has a better Return On Equity (4.55%) than 61.90% of its industry peers.
• The last Return On Invested Capital (4.45%) for HQY is above the 3 year average (1.70%), which is a sign of increasing profitability.
• The Profit Margin of HQY (8.41%) is better than 89.52% of its industry peers.
• HQY has a better Operating Margin (17.36%) than 97.14% of its industry peers.
• HQY has a Gross Margin of 65.52%. This is amongst the best in the industry. HQY outperforms 88.57% of its industry peers.

Why is NASDAQ:HQY a 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 7 as its setup rating:

Besides having an excellent technical rating, HQY also presents 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 96.45, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of HQY contains the most current fundamental analsysis.

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

Keep in mind

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.