HEALTHEQUITY INC (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 Assessment of NASDAQ:HQY

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:HQY has earned a 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.
• 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.
• 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!
• The Earnings Per Share is expected to grow by 24.93% on average over the next years. This is a very strong growth
• 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.
• 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.

What does the Health looks like 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:

• HQY has an Altman-Z score of 4.81. This indicates that HQY is financially healthy and has little risk of bankruptcy at the moment.
• HQY's Altman-Z score of 4.81 is amongst the best of the industry. HQY outperforms 82.24% of its industry peers.
• 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.
• With an excellent Current ratio value of 3.20, HQY belongs to the best of the industry, outperforming 87.85% of the companies in the same industry.
• HQY has a Quick Ratio of 3.20. This indicates that HQY is financially healthy and has no problem in meeting its short term obligations.
• HQY has a better Quick ratio (3.20) than 87.85% of its industry peers.

Understanding NASDAQ:HQY's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:HQY was assigned a score of 6 for profitability:

• HQY's Return On Assets of 2.77% is fine compared to the rest of the industry. HQY outperforms 66.36% of its industry peers.
• HQY has a better Return On Equity (4.55%) than 62.62% of its industry peers.
• The 3 year average ROIC (1.70%) for HQY is below the current ROIC(4.45%), indicating increased profibility in the last year.
• HQY's Profit Margin of 8.41% is amongst the best of the industry. HQY outperforms 89.72% of its industry peers.
• Looking at the Operating Margin, with a value of 17.36%, HQY belongs to the top of the industry, outperforming 97.20% of the companies in the same industry.
• The Gross Margin of HQY (65.52%) is better than 86.92% 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 7 as its setup rating, indicating its current consolidation status.

HQY has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. 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 102.22, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

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

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.