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HealthEquity, Inc. (HQY) Soars to 52-Week High, Time to Cash Out?
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Shares of HealthEquity (HQY - Free Report) have been strong performers lately, with the stock up 16.8% over the past month. The stock hit a new 52-week high of $99 in the previous session. HealthEquity has gained 47.7% since the start of the year compared to the 3.2% move for the Zacks Medical sector and the -4.8% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on September 3, 2024, HealthEquity reported EPS of $0.86 versus consensus estimate of $0.7 while it beat the consensus revenue estimate by 5.43%.
For the current fiscal year, HealthEquity is expected to post earnings of $3.09 per share on $1.18 billion in revenues. This represents a 37.33% change in EPS on a 18.23% change in revenues. For the next fiscal year, the company is expected to earn $3.73 per share on $1.32 billion in revenues. This represents a year-over-year change of 20.81% and 11.78%, respectively.
Valuation Metrics
HealthEquity may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
HealthEquity has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 31.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.5X. On a trailing cash flow basis, the stock currently trades at 28.7X versus its peer group's average of 11.8X. Additionally, the stock has a PEG ratio of 1.13. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, HealthEquity currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if HealthEquity fits the bill. Thus, it seems as though HealthEquity shares could still be poised for more gains ahead.
How Does HQY Stack Up to the Competition?
Shares of HQY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Pediatrix Medical Group, Inc. (MD - Free Report) . MD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Pediatrix Medical Group, Inc. beat our consensus estimate by 18.92%, and for the current fiscal year, MD is expected to post earnings of $1.43 per share on revenue of $2 billion.
Shares of Pediatrix Medical Group, Inc. have gained 35.8% over the past month, and currently trade at a forward P/E of 12.37X and a P/CF of 10.26X.
The Medical Services industry may rank in the bottom 55% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for HQY and MD, even beyond their own solid fundamental situation.
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HealthEquity, Inc. (HQY) Soars to 52-Week High, Time to Cash Out?
Shares of HealthEquity (HQY - Free Report) have been strong performers lately, with the stock up 16.8% over the past month. The stock hit a new 52-week high of $99 in the previous session. HealthEquity has gained 47.7% since the start of the year compared to the 3.2% move for the Zacks Medical sector and the -4.8% return for the Zacks Medical Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on September 3, 2024, HealthEquity reported EPS of $0.86 versus consensus estimate of $0.7 while it beat the consensus revenue estimate by 5.43%.
For the current fiscal year, HealthEquity is expected to post earnings of $3.09 per share on $1.18 billion in revenues. This represents a 37.33% change in EPS on a 18.23% change in revenues. For the next fiscal year, the company is expected to earn $3.73 per share on $1.32 billion in revenues. This represents a year-over-year change of 20.81% and 11.78%, respectively.
Valuation Metrics
HealthEquity may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
HealthEquity has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 31.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.5X. On a trailing cash flow basis, the stock currently trades at 28.7X versus its peer group's average of 11.8X. Additionally, the stock has a PEG ratio of 1.13. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, HealthEquity currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if HealthEquity fits the bill. Thus, it seems as though HealthEquity shares could still be poised for more gains ahead.
How Does HQY Stack Up to the Competition?
Shares of HQY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Pediatrix Medical Group, Inc. (MD - Free Report) . MD has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Pediatrix Medical Group, Inc. beat our consensus estimate by 18.92%, and for the current fiscal year, MD is expected to post earnings of $1.43 per share on revenue of $2 billion.
Shares of Pediatrix Medical Group, Inc. have gained 35.8% over the past month, and currently trade at a forward P/E of 12.37X and a P/CF of 10.26X.
The Medical Services industry may rank in the bottom 55% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for HQY and MD, even beyond their own solid fundamental situation.