📊 HQY Key Takeaways
Is HQY a Good Investment? Thesis Analysis
HealthEquity demonstrates exceptional financial health with 69.5% gross margins, 24.6% operating margins, and exceptional 34.7% free cash flow conversion, indicating a highly efficient capital-light business model. Net income surged 122.5% YoY with strong operational cash flow generation and conservative 0.45x debt-to-equity leverage, though moderate 9.5% revenue growth limits upside potential and ROE of 10.2% suggests capital deployment could be optimized.
Why Buy HQY? Key Strengths
- Outstanding profitability with 16.4% net margin and 122.5% YoY net income growth driven by operational leverage
- Exceptional cash generation with 455.1M free cash flow (34.7% FCF margin) and minimal capex requirements indicating highly scalable business
- Strong financial fortress with 3.27x current ratio, 27.3x interest coverage, and conservative 0.45x debt-to-equity ratio
- Premium gross margins of 69.5% and operating margins of 24.6% indicate strong competitive moat and pricing power
HQY Investment Risks to Consider
- Revenue growth of 9.5% YoY is moderate; concerning if growth trajectory is decelerating further
- ROE of 10.2% is underwhelming despite strong profitability, suggesting capital may be deployed inefficiently or underutilized
- Exceptional 122.5% net income growth may be unsustainable if driven by one-time margin expansions, share buybacks, or favorable tax items rather than organic revenue growth
- Business services sector exposure to economic cycles and potential regulatory changes affecting customer demand
Key Metrics to Watch
- Revenue growth acceleration/deceleration trends—critical to validate 9.5% is sustainable or expanding
- Gross and operating margin stability—determine if 122.5% net income growth is recurring or dependent on one-time factors
- Free cash flow generation and capex trends—monitor if capital-light model persists and FCF is deployed toward debt reduction
- Customer acquisition costs and retention rates—proxy for competitive positioning and market saturation
HQY Financial Metrics
💡 AI Analyst Insight
The 34.7% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. Strong liquidity with a 3.27x current ratio provides a solid financial cushion.
HQY Profitability Ratios
HQY vs Default Sector
How HEALTHEQUITY, INC. compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is HQY Overvalued or Undervalued?
Based on fundamental analysis, HEALTHEQUITY, INC. has mixed fundamental signals relative to the Default sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
HQY Balance Sheet & Liquidity
HQY 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: HEALTHEQUITY, INC.'s revenue has grown significantly by 74% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.64 reflects profitable operations.
HQY Growth Metrics (YoY)
HQY Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $300.4M | $5.7M | $0.06 |
| Q2 2026 | $299.9M | $35.8M | $0.40 |
| Q1 2026 | $287.6M | $28.8M | $0.33 |
| Q3 2025 | $249.2M | $5.7M | $0.06 |
| Q2 2025 | $243.5M | $10.6M | $0.12 |
| Q1 2025 | $244.4M | $4.1M | $0.05 |
| Q3 2024 | $216.1M | -$1.6M | $-0.02 |
| Q2 2024 | $206.1M | $10.6M | $0.12 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HQY Capital Allocation
HQY SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for HEALTHEQUITY, INC. (CIK: 0001428336)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_090416.xml | View → |
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_090457.xml | View → |
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_090440.xml | View → |
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_090427.xml | View → |
| Apr 8, 2026 | 4 | xslF345X06/form4-04082026_090458.xml | View → |
❓ Frequently Asked Questions about HQY
What is the AI rating for HQY?
HEALTHEQUITY, INC. (HQY) has an AI rating of BUY with 82% confidence, based on fundamental analysis of SEC EDGAR filings.
What are HQY's key strengths?
Claude: Outstanding profitability with 16.4% net margin and 122.5% YoY net income growth driven by operational leverage. Exceptional cash generation with 455.1M free cash flow (34.7% FCF margin) and minimal capex requirements indicating highly scalable business.
What are the risks of investing in HQY?
Claude: Revenue growth of 9.5% YoY is moderate; concerning if growth trajectory is decelerating further. ROE of 10.2% is underwhelming despite strong profitability, suggesting capital may be deployed inefficiently or underutilized.
What is HQY's revenue and growth?
HEALTHEQUITY, INC. reported revenue of $1.3B.
Does HQY pay dividends?
HEALTHEQUITY, INC. does not currently pay dividends.
Where can I find HQY SEC filings?
Official SEC filings for HEALTHEQUITY, INC. (CIK: 0001428336) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HQY's EPS?
HEALTHEQUITY, INC. has a diluted EPS of $2.46.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HQY a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, HEALTHEQUITY, INC. has a BUY rating with 82% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is HQY stock overvalued or undervalued?
Valuation metrics for HQY: ROE of 10.2% (sector avg: 15%), net margin of 16.4% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy HQY stock in 2026?
Our dual AI analysis gives HEALTHEQUITY, INC. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is HQY's free cash flow?
HEALTHEQUITY, INC.'s operating cash flow is $457.1M, with capital expenditures of $2.0M. FCF margin is 34.7%.
How does HQY compare to other Default stocks?
Vs Default sector averages: Net margin 16.4% (avg: 12%), ROE 10.2% (avg: 15%), current ratio 3.27 (avg: 1.8).