HealthEquity, Inc. Fundamental Analysis (NASDAQ: HQY)
HealthEquity, Inc. Fundamental Analysis (NASDAQ: HQY)
HealthEquity, Inc. (NASDAQ: HQY) shows moderate financial fundamentals with a PE ratio of 35.29, profit margin of 17.36%, and ROE of 11.43%. The company generates $1.4B in annual revenue with strong year-over-year growth of 20.03%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 78.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze HQY's fundamental strength across five key dimensions:
Efficiency Score
WeakHQY struggles to generate sufficient returns from assets.
Valuation Score
ModerateHQY shows balanced valuation metrics.
Growth Score
ExcellentHQY delivers strong and consistent growth momentum.
Financial Health Score
ExcellentHQY maintains a strong and stable balance sheet.
Profitability Score
ModerateHQY maintains healthy but balanced margins.
Key Financial Metrics
Is HQY Expensive or Cheap?
P/E Ratio
HQY trades at 35.29 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, HQY's PEG of 0.53 indicates potential undervaluation.
Price to Book
The market values HealthEquity, Inc. at 4.14 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 16.07 times EBITDA. This signals the market has high growth expectations.
How Well Does HQY Make Money?
Net Profit Margin
For every $100 in sales, HealthEquity, Inc. keeps $17.36 as profit after all expenses.
Operating Margin
Core operations generate 25.61 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.43 in profit for every $100 of shareholder equity.
ROA
HealthEquity, Inc. generates $7.23 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
HealthEquity, Inc. generates strong operating cash flow of $491.52M, reflecting robust business health.
Free Cash Flow
HealthEquity, Inc. generates strong free cash flow of $472.96M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.66 in free cash annually.
FCF Yield
HQY converts 5.71% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.29
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.53
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.14
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.07
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.49
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.99
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How HQY Stacks Against Its Sector Peers
| Metric | HQY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.29 | 31.85 | Worse (Expensive) |
| ROE | 11.43% | 532.00% | Weak |
| Net Margin | 17.36% | 24010.00% | Weak |
| Debt/Equity | 0.49 | 0.53 | Neutral |
| Current Ratio | 2.99 | 5.62 | Strong Liquidity |
| ROA | 7.23% | 21.00% | Weak |
HQY outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews HealthEquity, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
74.01%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
88.11%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
147.71%
Industry Style: Defensive, Growth, Innovation
High Growth