NASDAQ:HQY: a strong growth stock preparing for the next leg up?.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether HEALTHEQUITY INC (NASDAQ:HQY) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but HEALTHEQUITY INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

A Closer Look at Growth for NASDAQ:HQY

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:HQY, the assigned 8 reflects its growth potential:

• 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.
• HQY shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.97%.
• The Revenue has been growing by 30.29% on average over the past years. This is a very strong growth!
• The Earnings Per Share is expected to grow by 33.71% on average over the next years. This is a very strong growth
• Based on estimates for the next years, HQY will show a quite strong growth in Revenue. The Revenue will grow by 13.28% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

Health Insights: NASDAQ:HQY

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:HQY has earned a 7 out of 10:

• An Altman-Z score of 3.67 indicates that HQY is not in any danger for bankruptcy at the moment.
• HQY has a Altman-Z score of 3.67. This is in the better half of the industry: HQY outperforms 76.32% of its industry peers.
• HQY has a Debt to FCF ratio of 5.17. This is in the better half of the industry: HQY outperforms 66.67% of its industry peers.
• HQY has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
• The Debt to Equity ratio of HQY (0.45) is better than 61.40% of its industry peers.
• A Current Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
• With an excellent Current ratio value of 4.09, HQY belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
• A Quick Ratio of 4.09 indicates that HQY has no problem at all paying its short term obligations.
• HQY's Quick ratio of 4.09 is amongst the best of the industry. HQY outperforms 89.47% of its industry peers.

Assessing Profitability for NASDAQ:HQY

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:HQY scores a 6 out of 10:

• HQY's Return On Equity of 0.66% is fine compared to the rest of the industry. HQY outperforms 60.53% of its industry peers.
• The 3 year average ROIC (1.54%) for HQY is below the current ROIC(2.23%), indicating increased profibility in the last year.
• HQY has a better Profit Margin (1.37%) than 61.40% of its industry peers.
• With an excellent Operating Margin value of 8.93%, HQY belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 59.69%, HQY belongs to the top of the industry, outperforming 82.46% of the companies in the same industry.

Why is NASDAQ:HQY a setup?

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 7:

Although the technical rating is bad, HQY does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 66.10, a Stop Loss order could be placed below this zone.

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

For an up to date full fundamental analysis you can check the fundamental report of HQY

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

Keep in mind

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.