Fact based stock research
HealthEquity (NasdaqGS:HQY)

US42226A1079

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

HealthEquity stock research in summary

healthequity.com

ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), HealthEquity (Health Care Managed, USA) shares have lower financial characteristics compared with similar stocks. Shares of HealthEquity are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives), show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on HealthEquity's financial characteristics. As the company HealthEquity's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 9), low growth (Obermatt Growth Rank of 47), and risky financing practices (Obermatt Safety Rank of 44), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	9
Growth Rank	47
Safety Rank	44
Combined Rank	7

Country	USA
Industry	Health Care Managed
Index	NASDAQ, S&P MIDCAP
Size class	Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: HealthEquity

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	39	20	9
GROWTH
GROWTH	11	31	87	47
SAFETY
SAFETY	42	84	41	44
SENTIMENT
SENTIMENT	n/a	65	100	^new
360° VIEW
360° VIEW	n/a	63	78	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 31-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better HealthEquity is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	39	20	9
GROWTH
GROWTH	11	31	87	47
SAFETY
SAFETY	42	84	41	44
COMBINED
COMBINED	11	33	26	7

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of HealthEquity the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), HealthEquity shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for HealthEquity. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 50, which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning HealthEquity's profit levels. But Price-to-Sales is 12 which means that the stock price compared with what market professionals expect for future profits is higher than for 88% of comparable companies, indicating a low value concerning HealthEquity's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 44 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a sell recommendation based on HealthEquity's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then HealthEquity is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	40	38	30	12
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	24	52	72	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	78	65	42	44
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	31	39	20	9

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of HealthEquity; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), HealthEquity shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for HealthEquity. Profit Growth has a rank of 60, which means that currently professionals expect the company to grow its profits more than 60% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 81 (above 81% of alternative investments). But Sales Growth has a below the median rank of 46, which means that, currently, professionals expect the company to grow less than 54% of its competitors, and Capital Growth also has a lower rank of 1. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for HealthEquity. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	8	26	81	46
PROFIT GROWTH
PROFIT GROWTH	80	29	65	60
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	79	1
STOCK RETURNS
STOCK RETURNS	62	41	51	81
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	11	31	87	47

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of HealthEquity.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% compared with alternatives), the company HealthEquity has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of HealthEquity is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for HealthEquity. Liquidity is at 70, meaning the company generates more profit to service its debt than 70% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 31, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 69% of its competitors. Leverage is also high at a rank of 44, which means that the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% compared with alternatives), HealthEquity has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	34	38	45	44
REFINANCING
REFINANCING	50	73	31	31
LIQUIDITY
LIQUIDITY	39	83	62	70
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	42	84	41	44

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of HealthEquity and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	79	100	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	100	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	17	86	^new
MARKET PULSE
MARKET PULSE	n/a	66	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	65	100	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for HealthEquity.
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