NASDAQ:HQY: a strong growth stock preparing for the next leg up?.

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.

Growth Examination for NASDAQ:HQY

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:HQY has received a 8 out of 10:

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

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:

• An Altman-Z score of 5.00 indicates that HQY is not in any danger for bankruptcy at the moment.
• HQY has a better Altman-Z score (5.00) than 86.11% of its industry peers.
• A Current Ratio of 3.20 indicates that HQY has no problem at all paying its short term obligations.
• Looking at the Current ratio, with a value of 3.20, HQY belongs to the top of the industry, outperforming 87.96% of the companies in the same industry.
• A Quick Ratio of 3.20 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a Quick ratio of 3.20. This is amongst the best in the industry. HQY outperforms 87.96% of its industry peers.

Profitability Assessment of NASDAQ:HQY

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:HQY, the assigned 6 is noteworthy for profitability:

• HQY has a better Return On Assets (2.77%) than 68.52% of its industry peers.
• HQY has a better Return On Equity (4.55%) than 62.96% 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.
• With an excellent Profit Margin value of 8.41%, HQY belongs to the best of the industry, outperforming 90.74% of the companies in the same industry.
• HQY has a Operating Margin of 17.36%. This is amongst the best in the industry. HQY outperforms 97.22% of its industry peers.
• HQY has a Gross Margin of 65.52%. This is amongst the best in the industry. HQY outperforms 87.96% of its industry peers.

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 7 as its setup rating, suggesting a particular level of consolidation in the stock.

Besides having an excellent technical rating, HQY also presents a decent setup pattern. Prices have been consolidating lately. There is very little resistance above the current price. Very recently a Pocket Pivot signal was observed. This is another positive 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.

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

Disclaimer

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.