Back to top

Image: Shutterstock

HealthEquity Stock May Gain From Its Latest Partnership With Paytient

Read MoreHide Full Article

HealthEquity (HQY - Free Report) recently announced a new collaboration with Paytient, a healthcare technology firm, to offer working professionals greater confidence in pursuing healthcare through Health Payment Accounts (HPAs).

This new partnership is likely to enhance working professionals’ access to healthcare. HPAs offer a no-interest, no-fee option for employees to pursue medical care with flexible payment terms. As a result of the partnership, a lot of employees are likely to onboard HQY’s platform where they can get the benefit of Health Savings Accounts (HSAs), along with the payment flexibility provided by Paytient. This collaboration is likely to increase HealthEquity’s customer base and help in addition to HSAs over time, thus increasing the company’s service segment revenues.

More on the HQY’s Latest Partnership

A significant percentage of workplace-insured Americans are deferring healthcare due to hefty costs. With HQY’s latest collaboration with Paytient, employers can now provide employees and their families with the opportunity to better manage copays for medical, dental, vision, prescription, and behavioral care over time by using HPAs. This benefit extends to veterinary care as well. This safety net reduces the burden and embarrassment associated with applying for credit, enhances access to necessary care, and helps employees save money on fees and interest.

The HPA benefit complements consumer-directed benefits such as Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and Health Reimbursement Accounts (HRAs). With the HPA, employees can select the medical plan that best fits their families’ needs without worrying about draining their savings or going into debt.

No credit checks are required for HPA users, and there is no impact on credit scores for using an HPA. With a variety of customizable payment and payback options, members have control over their HPA payments. In the meantime, companies save money in the short term when workers select less expensive health insurance and in the long run when improved access to care lowers the number of costly claims.

Notable Developments for HQY

Recently, HealthEquity reported better-than-expected second-quarter fiscal 2025 results. The company witnessed solid top-line and bottom-line performances in the fiscal second quarter. Solid growth in HSAs also drove the top line. The solid uptick in total HSA assets in the reported quarter is promising. The expansion of both margins also bodes well. The recent deal with Paytient is likely to drive the number higher in the upcoming quarter.

HealthEquity has revised its revenue and EPS projections for fiscal 2025. For fiscal 2025, revenues are now projected to be between $1.17 billion and $1.19 billion, up from the previous outlook of $1.16 billion to $1.18 billion. Adjusted EPS is now expected to be in the range of $2.98-$3.14, up from the earlier guidance of $2.93-$3.10.

In May, HQY announced the completion of the acquisition of Conduent’s BenefitWallet HSA portfolio. The acquisition of BenefitWallet implies a significant boost to the service revenues of HealthEquity with an increase in the number of customer accounts. Moreover, Conduent’s HSA assets should lead to higher fees and custodial revenues.

Price Performance

In the past six months, HQY shares have gained 22.2% compared with the industry’s rise of 6.3%. The S&P 500 has gained 15.6% in the same time frame.

Zacks Investment Research

Image Source: Zacks Investment Research

HQY’s Zacks Rank & Stocks to Consider

HQY carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the broader medical space are Universal Health Service (UHS - Free Report) , Quest Diagnostics (DGX - Free Report) and ABM Industries (ABM - Free Report) . While Universal Health Service sports a Zacks Rank #1 (Strong Buy), Quest Diagnostics and ABM Industries presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Universal Health Service has an estimated long-term growth rate of 19%. UHS’ earnings surpassed estimates in each of the trailing four quarters, with the average being 14.58%.

Universal Health Service has gained 56.1% so far this year compared with the industry's 48.1% rise.

Quest Diagnostics has an estimated long-term growth rate of 6.20%. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.31%.

Quest Diagnostics shares have gained 13.9% so far this year compared with the industry’s 17.9% rise.

ABM Industries’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.34%.

ABM's shares have risen 27.4% so far this year compared with the industry’s 17% growth.

Published in