Why NASDAQ:HQY Is a Promising High-Growth Stock in the Midst of Consolidation.

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.

ChartMill's Evaluation of Growth

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 69.49% over the past year.
• Measured over the past years, HQY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.71% on average per year.
• The Revenue has grown by 16.81% in the past year. This is quite good.
• Measured over the past years, HQY shows a very strong growth in Revenue. The Revenue has been growing by 30.29% on average per year.
• Based on estimates for the next years, HQY will show a very strong growth in Earnings Per Share. The EPS will grow by 37.01% 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 14.79% on average per year.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Understanding NASDAQ:HQY's Health Score

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:

• HQY has an Altman-Z score of 4.35. This indicates that HQY is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 4.35, HQY belongs to the best of the industry, outperforming 82.76% of the companies in the same industry.
• HQY's Debt to FCF ratio of 4.96 is fine compared to the rest of the industry. HQY outperforms 71.55% of its industry peers.
• A Debt/Equity ratio of 0.44 indicates that HQY is not too dependend on debt financing.
• The Debt to Equity ratio of HQY (0.44) is better than 63.79% of its industry peers.
• A Current Ratio of 4.93 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a Current ratio of 4.93. This is amongst the best in the industry. HQY outperforms 92.24% of its industry peers.
• A Quick Ratio of 4.93 indicates that HQY has no problem at all paying its short term obligations.
• HQY has a better Quick ratio (4.93) than 93.97% of its industry peers.

Profitability Examination for NASDAQ:HQY

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:HQY has achieved a 6:

• HQY has a Return On Assets of 0.94%. This is in the better half of the industry: HQY outperforms 61.21% of its industry peers.
• Looking at the Return On Equity, with a value of 1.47%, HQY is in the better half of the industry, outperforming 62.93% of the companies in the same industry.
• The last Return On Invested Capital (2.77%) for HQY is above the 3 year average (1.54%), which is a sign of increasing profitability.
• HQY's Profit Margin of 3.00% is fine compared to the rest of the industry. HQY outperforms 75.00% of its industry peers.
• Looking at the Operating Margin, with a value of 10.84%, HQY belongs to the top of the industry, outperforming 87.93% of the companies in the same industry.
• HQY has a Gross Margin of 60.90%. This is amongst the best in the industry. HQY outperforms 84.48% of its industry peers.

Looking at the Setup

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:HQY exhibits a 7 setup rating, indicating its consolidation status in recent days and weeks.

Besides having an excellent technical rating, HQY also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. A pullback is taking place, which may present a nice opportunity for an entry. There is a support zone below the current price at 79.47, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

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.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.