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Here’s Why You Should Buy HealthEquity (HQY) Stock Right Now


HealthEquity, Inc. HQY is currently one of the top-performing stocks in the Medical Services industry. Strong Health Savings Account (HSA) member growth and a solid guidance for fiscal 2019 currently favor the stock.

Shares Up

In the past year, shares of the Utah-based company have rallied 72.8% compared with the industry’s 40.1% rise. The current level is also higher than the S&P 500 index’s increase of 13.4%.

This Zacks Rank #2 (Buy) stock currently has a Growth Score of B. This reflects possibilities of outperformance over the long haul. Our research shows that stocks, with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, are better picks than most.

Factors That Make It an Attractive Pick

HealthEquity Joins S&P MidCap 400

With a market cap of $5.46 billion, HealthEquity replaced WellCare Health Plans in the S&P MidCap 400 index. The company was earlier a member of the S&P SmallCap 600. A strong presence in the HSA industry and a solid revenue base are contributing factors.

Over the last four years, the company’s revenues have seen a CAGR of 37.7% to $230 million.

FY19 Guidance Solid

For fiscal 2019, HealthEquity projects revenues in the range of $279-$285 million, up from the previous guidance of $278-$284 million.

Adjusted income is projected in the range of $67-$71 million, up from the previous $55-$59 million. Adjusted net income per share is expected in the band of $1.05-$1.11.

HSA Custodian

HealthEquity clinched the top position in the HSA industry through its first-mover advantage, focus on innovation and differentiated capabilities.

In the last reported quarter, HealthEquity registered solid HSA member growth. The total number of HSAs for which HealthEquity served as a non-bank custodian (HSA Members) was 3.6 million, up 23% year over year.

Which Way Are Estimates Treading?

For the ongoing quarter, the Zacks Consensus Estimate for earnings is pegged at 25 cents, reflecting year-over-year growth of 47.1%. The same for revenues is pegged at $69.8 million, indicating an increase of 22.8% year over year.

For the full year, the Zacks Consensus Estimate for earnings is pegged at $1.11, reflecting growth of 105.6% from a year ago. The same for revenues stands at $284.1 million, showing an improvement of 23.8% from the previous year.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Intuitive Surgical ISRG, Masimo Corporation MASI and Inogen, Inc. INGN.

Intuitive Surgical has an expected long-term earnings growth of 14.7%. The stock has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.

Inogen’s long-term earnings growth rate is projected at 24.5%. The stock carries a Zacks Rank #2.

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