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HealthEquity (HQY) Gains But Lags Market: What You Should Know

Zacks Equity Research

HealthEquity (HQY) closed the most recent trading day at $68.50, moving +1.41% from the previous trading session. This change lagged the S&P 500's 1.5% gain on the day. Elsewhere, the Dow gained 1.48%, while the tech-heavy Nasdaq added 1.95%.

Coming into today, shares of the provider of services for managing health care accounts had lost 3.99% in the past month. In that same time, the Medical sector lost 1.46%, while the S&P 500 lost 4.19%.

Investors will be hoping for strength from HQY as it approaches its next earnings release. The company is expected to report EPS of $0.35, up 2.94% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $85.38 million, up 20.14% from the year-ago period.

HQY's full-year Zacks Consensus Estimates are calling for earnings of $1.33 per share and revenue of $343.27 million. These results would represent year-over-year changes of +11.76% and +19.5%, respectively.

Any recent changes to analyst estimates for HQY should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.12% higher. HQY is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, HQY is currently trading at a Forward P/E ratio of 50.88. Its industry sports an average Forward P/E of 21.13, so we one might conclude that HQY is trading at a premium comparatively.

We can also see that HQY currently has a PEG ratio of 2.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical Services was holding an average PEG ratio of 1.56 at yesterday's closing price.

The Medical Services industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 83, which puts it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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