HealthEquity Inc (HQY, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $69.56, HealthEquity Inc has witnessed a surge of 4.08% over a period, marked against a three-month change of 4.05%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that HealthEquity Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
HealthEquity Inc's GF Score components are as follows:
- 1. Financial strength rank: 6/10
- 2. Profitability rank: 9/10
- 3. Growth rank: 9/10
- 4. GF Value rank: 6/10
- 5. Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability and growth, and decent ranks in financial strength, GF value, and momentum, GuruFocus assigned HealthEquity Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding HealthEquity Inc's Business
HealthEquity Inc, with a market cap of $5.95 billion and sales of $900.5 million, provides solutions that allow consumers to make healthcare saving and spending decisions. Its technology allows customers to see their tax-advantaged healthcare savings, compare treatment options and pricing, pay healthcare bills, receive benefit information, and earn wellness incentives. The firm primarily partners with health plans and employers and serves as the custodian of its customers' health savings accounts (HSAs). HealthEquity also engages in reimbursement arrangements and offers healthcare incentives to its members. In addition, the company provides investment advisory services to customers whose account balances exceed a certain threshold. HealthEquity generates its revenue in the United States.
Financial Strength Breakdown
According to the Financial Strength rating, HealthEquity Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure.
Profitability Rank Breakdown
The Profitability Rank shows HealthEquity Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms HealthEquity Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency.
Growth Rank Breakdown
Ranked highly in Growth, HealthEquity Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 9.5%, which outperforms better than 52.54% of 571 companies in the Healthcare Providers & Services industry. Moreover, HealthEquity Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 4.1, and the rate over the past five years is 8.1. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given HealthEquity Inc's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in identifying promising investment opportunities. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
