Reasons to Hold HealthEquity Stock in Your Portfolio for Now

HealthEquity, Inc. HQY has been gaining from its business model and strategy. The optimism, led by a solid first-quarter fiscal 2025 performance and strength in Health Savings Accounts (HSAs), is expected to contribute further. However, data security threats are major concerns.In the year-to-date period, the Zacks Rank #3 (Hold) company’s shares have declined 7% compared with a 4% decline of the industry. The S&P 500 has increased 9.5% during the said time frame.The renowned provider of technology-enabled services platforms for healthcare savings and spending decisions has a market capitalization of $8.04 billion. The company projects 20.8% growth over the next five years and expects to witness continued improvements in its business. HealthEquity’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 12.41%.Reasons Favoring HQY’s GrowthExpansion of Health Savings Accounts: HealthEquity has experienced significant growth in its HSA offerings. As of April 30, 2025, the total number of HSAs for which HealthEquity served as a non-bank custodian was 9.9 million, up 9% year over year. HealthEquity reported 770,000 HSAs with investments as of April 30, 2025, up 16% year over year. Total accounts, as of April 30, 2025, were 17.1 million, up 6.9% year over year. This uptick included total HSAs and 7.2 million CDBs, up 4.3% year over year. Total HSA assets were $31.3 billion at the end of April 30, 2025, up 15% year over year. This included $17.1 billion of HSA cash (up 7.5% year over year) and $14.2 billion of HSA investments (up 24.6% year over year). Deposits held on behalf of HealthEquity’s clients to facilitate the administration of its CDBs, from which the company generates custodial revenues, were $0.9 billion as of April 30, 2025.AI & Digital Innovation Drive Scalable Efficiency: HQY’s strategic focus on AI and mobile-first experiences is accelerating growth and margin expansion. In the fiscal first quarter, the company advanced its AI-driven claims adjudication system for real-time, human-free processing, improving efficiency and member satisfaction. AI chat support is reducing call volume while catering to digital-native users, and a shift to secure, app-based access, with over 1.2 million downloads and mandatory multifactor authentication by fall 2025, enhances user trust. New features like mobile-based brokerage investing and digital wallet integration deepen daily engagement, boosting interchange revenue and strengthening long-term loyalty and profitability.Decent Q1 Results: HealthEquity delivered better-than-expected first-quarter fiscal 2026 results, driven by strong top-and bottom-line growth, robust HSA expansion with 150,000 new accounts, and a notable rise in total HSA assets. The company saw significant operating and gross margin improvements, maintained solid enterprise pipeline momentum despite macro headwinds, and reduced fraud-related costs sharply from $11 million in the prior quarter to $3 million in the first quarter of fiscal 2026.Image Source: Zacks Investment ResearchA Factor That May Offset HQY’s GainsData Security Threats: HealthEquity deals with a high level of sensitive personal data and information. Therefore, its ability to ensure the security of its technology platforms and thus sensitive customer and partner information is critical to its operations. Any form of security breach might result in the loss of sensitive information, theft or loss of actual funds, litigation and the performance of indemnity obligations to customers.  Any consequent legal claims or proceedings could disrupt HealthEquity’s operations, damage its reputation and cause a loss of confidence in the company’s products and services, thereby adversely affecting its business.Estimate TrendHealthEquity has been witnessing a positive estimate revision trend for fiscal 2026. Over the past 60 days, the Zacks Consensus Estimate for earnings per share (EPS) has moved 3 cents upward to $3.73.The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues is pegged at $318.8 million, implying a 6.3% rise from the year-ago reported number. The consensus mark for fiscal second-quarter EPS is pinned at 92 cents, implying a 6.9% improvement year over year.Key PicksSome better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. MEDP, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX.Medpace Holdings, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2025 EPS of $3.10, beating the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report HealthEquity, Inc. (HQY): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks