HEALTHEQUITY INC (HQY) Stock Fundamental Analysis
NASDAQ:HQY - Nasdaq - US42226A1079 - Common Stock - Currency: USD
HQY gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 106 industry peers in the Health Care Providers & Services industry. HQY scores excellent on profitability, but there are some minor concerns on its financial health. HQY is valued quite expensive, but it does show an excellent growth. These ratings could make HQY a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
HQY had positive earnings in the past year.
HQY had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: HQY reported negative net income in multiple years.
In the past 5 years HQY always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.80%, HQY is in the better half of the industry, outperforming 65.09% of the companies in the same industry.
With a decent Return On Equity value of 4.57%, HQY is doing good in the industry, outperforming 60.38% of the companies in the same industry.
HQY has a Return On Invested Capital of 4.86%. This is comparable to the rest of the industry: HQY outperforms 56.60% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HQY is significantly below the industry average of 8.79%.
The 3 year average ROIC (3.06%) for HQY is below the current ROIC(4.86%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 4.57% | ||
| ROIC | 4.86% |
ROA(3y)1.24%
ROA(5y)0.52%
ROE(3y)1.98%
ROE(5y)0.84%
ROIC(3y)3.06%
ROIC(5y)2.55%
1.3 Margins
HQY has a better Profit Margin (8.06%) than 86.79% of its industry peers.
In the last couple of years the Profit Margin of HQY has grown nicely.
HQY has a better Operating Margin (16.91%) than 96.23% of its industry peers.
In the last couple of years the Operating Margin of HQY has declined.
HQY has a better Gross Margin (64.78%) than 86.79% of its industry peers.
In the last couple of years the Gross Margin of HQY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.91% | ||
| PM (TTM) | 8.06% | ||
| GM | 64.78% |
OM growth 3Y46.64%
OM growth 5Y-3.79%
PM growth 3YN/A
PM growth 5Y1.57%
GM growth 3Y4.97%
GM growth 5Y1.12%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HQY is destroying value.
Compared to 1 year ago, HQY has more shares outstanding
Compared to 5 years ago, HQY has more shares outstanding
The debt/assets ratio for HQY is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.03 indicates that HQY is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.03, HQY is in the better half of the industry, outperforming 78.30% of the companies in the same industry.
HQY has a Debt/Equity ratio of 0.50. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.50, HQY perfoms like the industry average, outperforming 59.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.03 |
ROIC/WACC0.57
WACC8.49%
2.3 Liquidity
A Current Ratio of 3.06 indicates that HQY has no problem at all paying its short term obligations.
HQY's Current ratio of 3.06 is amongst the best of the industry. HQY outperforms 87.74% of its industry peers.
A Quick Ratio of 3.06 indicates that HQY has no problem at all paying its short term obligations.
HQY has a Quick ratio of 3.06. This is amongst the best in the industry. HQY outperforms 87.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.06 | ||
| Quick Ratio | 3.06 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 38.50% over the past year.
HQY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.72% yearly.
HQY shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.03%.
The Revenue has been growing by 17.66% on average over the past years. This is quite good.
EPS 1Y (TTM)38.5%
EPS 3Y33.01%
EPS 5Y12.72%
EPS Q2Q%9.52%
Revenue 1Y (TTM)20.03%
Revenue growth 3Y16.61%
Revenue growth 5Y17.66%
Sales Q2Q%18.84%
3.2 Future
Based on estimates for the next years, HQY will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.79% on average per year.
HQY is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.09% yearly.
EPS Next Y17.97%
EPS Next 2Y20.38%
EPS Next 3Y19.79%
EPS Next 5YN/A
Revenue Next Year9.04%
Revenue Next 2Y9.54%
Revenue Next 3Y10.09%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 27.00, the valuation of HQY can be described as expensive.
HQY's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of HQY to the average of the S&P500 Index (28.29), we can say HQY is valued inline with the index average.
HQY is valuated rather expensively with a Price/Forward Earnings ratio of 22.89.
Based on the Price/Forward Earnings ratio, HQY is valued a bit cheaper than the industry average as 61.32% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, HQY is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27 | ||
| Fwd PE | 22.89 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HQY is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 22.09 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of HQY may justify a higher PE ratio.
A more expensive valuation may be justified as HQY's earnings are expected to grow with 19.79% in the coming years.
PEG (NY)1.5
PEG (5Y)2.12
EPS Next 2Y20.38%
EPS Next 3Y19.79%
5. Dividend
5.1 Amount
HQY does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
84.52
+2.03 (+2.46%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners105.29%
Inst Owner Change0%
Ins Owners1.55%
Ins Owner Change-0.07%
Market Cap7.31B
Analysts85.56
Price Target114.6 (35.59%)
Short Float %5.11%
Short Ratio5.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.96%
Min EPS beat(2)-5.01%
Max EPS beat(2)6.92%
EPS beat(4)3
Avg EPS beat(4)11.08%
Min EPS beat(4)-5.01%
Max EPS beat(4)21.92%
EPS beat(8)7
Avg EPS beat(8)13.18%
EPS beat(12)10
Avg EPS beat(12)10.02%
EPS beat(16)12
Avg EPS beat(16)8.63%
Revenue beat(2)2
Avg Revenue beat(2)1.61%
Min Revenue beat(2)0.88%
Max Revenue beat(2)2.35%
Revenue beat(4)4
Avg Revenue beat(4)2.46%
Min Revenue beat(4)0.88%
Max Revenue beat(4)4.24%
Revenue beat(8)8
Avg Revenue beat(8)1.65%
Revenue beat(12)11
Avg Revenue beat(12)1.41%
Revenue beat(16)14
Avg Revenue beat(16)1%
PT rev (1m)-2.9%
PT rev (3m)-0.57%
EPS NQ rev (1m)-8.76%
EPS NQ rev (3m)-9.05%
EPS NY rev (1m)-1.51%
EPS NY rev (3m)-1.52%
Revenue NQ rev (1m)0.17%
Revenue NQ rev (3m)-1.31%
Revenue NY rev (1m)0.23%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27 | ||
| Fwd PE | 22.89 | ||
| P/S | 6.09 | ||
| P/FCF | N/A | ||
| P/OCF | 21.51 | ||
| P/B | 3.46 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.09 |
EPS(TTM)3.13
EY3.7%
EPS(NY)3.69
Fwd EY4.37%
FCF(TTM)-1.91
FCFYN/A
OCF(TTM)3.93
OCFY4.65%
SpS13.87
BVpS24.45
TBVpS-8.53
PEG (NY)1.5
PEG (5Y)2.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 4.57% | ||
| ROCE | 6.16% | ||
| ROIC | 4.86% | ||
| ROICexc | 5.33% | ||
| ROICexgc | 111.41% | ||
| OM | 16.91% | ||
| PM (TTM) | 8.06% | ||
| GM | 64.78% | ||
| FCFM | N/A |
ROA(3y)1.24%
ROA(5y)0.52%
ROE(3y)1.98%
ROE(5y)0.84%
ROIC(3y)3.06%
ROIC(5y)2.55%
ROICexc(3y)3.42%
ROICexc(5y)2.86%
ROICexgc(3y)66.66%
ROICexgc(5y)61.07%
ROCE(3y)3.88%
ROCE(5y)3.24%
ROICexcg growth 3Y56.29%
ROICexcg growth 5Y6.43%
ROICexc growth 3Y65.75%
ROICexc growth 5Y6.63%
OM growth 3Y46.64%
OM growth 5Y-3.79%
PM growth 3YN/A
PM growth 5Y1.57%
GM growth 3Y4.97%
GM growth 5Y1.12%
F-Score7
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.89 | ||
| Cap/Depr | 311.14% | ||
| Cap/Sales | 42.13% | ||
| Interest Coverage | 3.46 | ||
| Cash Conversion | 93.03% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.06 | ||
| Quick Ratio | 3.06 | ||
| Altman-Z | 4.03 |
F-Score7
WACC8.49%
ROIC/WACC0.57
Cap/Depr(3y)138.38%
Cap/Depr(5y)119.74%
Cap/Sales(3y)20.19%
Cap/Sales(5y)18.38%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)38.5%
EPS 3Y33.01%
EPS 5Y12.72%
EPS Q2Q%9.52%
EPS Next Y17.97%
EPS Next 2Y20.38%
EPS Next 3Y19.79%
EPS Next 5YN/A
Revenue 1Y (TTM)20.03%
Revenue growth 3Y16.61%
Revenue growth 5Y17.66%
Sales Q2Q%18.84%
Revenue Next Year9.04%
Revenue Next 2Y9.54%
Revenue Next 3Y10.09%
Revenue Next 5YN/A
EBIT growth 1Y58.33%
EBIT growth 3Y71.01%
EBIT growth 5Y13.2%
EBIT Next Year218.19%
EBIT Next 3Y63.18%
EBIT Next 5YN/A
FCF growth 1Y-184.17%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y39.96%
OCF growth 3Y34.08%
OCF growth 5Y26.48%