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

Zacks Equity Research

HealthEquity (HQY) closed at $58.62 in the latest trading session, marking a +0.15% move from the prior day. This move lagged the S&P 500's daily gain of 1.1%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 1.32%.

Heading into today, shares of the provider of services for managing health care accounts had lost 26.93% over the past month, lagging the Medical sector's loss of 3.2% and the S&P 500's loss of 5.05% in that time.

Investors will be hoping for strength from HQY as it approaches its next earnings release, which is expected to be September 3, 2019. On that day, HQY is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 2.94%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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.

Investors should also note any recent changes to analyst estimates for HQY. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. HQY currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, HQY is holding a Forward P/E ratio of 44.09. This represents a premium compared to its industry's average Forward P/E of 20.52.

Investors should also note that HQY has a PEG ratio of 2.19 right now. 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 1.53 at yesterday's closing price.

The Medical Services industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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