As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of HealthEquity, Inc. (NASDAQ:HQY), it is a company with strong financial health as well as an optimistic future outlook. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on HealthEquity here.
Flawless balance sheet with high growth potential
Investors in search for stocks with room to flourish should look no further than HQY, with its expected earnings growth of 22%. Earnings growth is paired with an eye-catching top-line trajectory also doubling over the same period, which indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. HQY's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. Investors should not worry about HQY’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a US$3.8b market cap company. HQY has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For HealthEquity, there are three important aspects you should further research:
- Historical Performance: What has HQY's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is HQY worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HQY is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HQY? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.