Is NASDAQ:HQY on the Verge of a Major Breakout as a Strong Growth Stock?

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if HEALTHEQUITY INC (NASDAQ:HQY) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted HEALTHEQUITY INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Unpacking NASDAQ:HQY's Growth Rating

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:HQY has achieved a 8 out of 10:

• The Earnings Per Share has grown by an impressive 54.78% 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 13.71% yearly.
• Looking at the last year, HQY shows a quite strong growth in Revenue. The Revenue has grown by 17.97% in the last year.
• HQY shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.29% yearly.
• Based on estimates for the next years, HQY will show a very strong growth in Earnings Per Share. The EPS will grow by 33.64% on average per year.
• Based on estimates for the next years, HQY will show a quite strong growth in Revenue. The Revenue will grow by 12.65% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

A Closer Look at Health for NASDAQ:HQY

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:HQY has earned a 7 out of 10:

• An Altman-Z score of 3.94 indicates that HQY is not in any danger for bankruptcy at the moment.
• HQY has a better Altman-Z score (3.94) than 79.28% of its industry peers.
• Looking at the Debt to FCF ratio, with a value of 5.17, HQY is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
• HQY has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
• HQY has a Debt to Equity ratio of 0.45. This is in the better half of the industry: HQY outperforms 62.16% of its industry peers.
• A Current Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
• HQY's Current ratio of 4.09 is amongst the best of the industry. HQY outperforms 89.19% of its industry peers.
• A Quick Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
• Looking at the Quick ratio, with a value of 4.09, HQY belongs to the top of the industry, outperforming 89.19% of the companies in the same industry.

Looking at the Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:HQY, the assigned 5 is a significant indicator of profitability:

• The 3 year average ROIC (1.54%) for HQY is below the current ROIC(2.23%), indicating increased profibility in the last year.
• The Profit Margin of HQY (1.37%) is better than 60.36% of its industry peers.
• HQY's Operating Margin of 8.93% is amongst the best of the industry. HQY outperforms 82.88% of its industry peers.
• Looking at the Gross Margin, with a value of 59.69%, HQY belongs to the top of the industry, outperforming 82.88% of the companies in the same industry.

How do we evaluate the setup for NASDAQ:HQY?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:HQY this score is currently 9:

HQY has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 71.69, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of HQY contains the most current fundamental analsysis.

Check the latest full technical report of HQY for a complete technical analysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.