Health-savings account manager HealthEquity Q2 revenue beats estimates

Overview

• HealthEquity Inc Q2 revenue grows 9%, beating analyst expectations, per LSEG data

• Net income for Q2 misses analyst estimates, per LSEG data

• Adjusted EBITDA rises 18%, exceeding expectations, per LSEG data

Outlook

• Company expects fiscal year revenue of $1.290 bln to $1.310 bln

• HealthEquity projects net income between $185 mln and $200 mln

• Company forecasts non-GAAP net income of $329 mln to $344 mln

• HealthEquity anticipates adjusted EBITDA of $540 mln to $560 mln

Result Drivers

• HSA GROWTH - HealthEquity reports a 6% increase in HSAs, reaching 10.0 million, contributing to revenue growth

• LEGISLATIVE EXPANSION - Company anticipates benefits from recent legislative expansion of HSAs

• CUSTODIAL REVENUE - Custodial revenue increased, driven by higher total HSA assets, which grew 12% year over year

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Healthequity Inc is $125.00, about 28.5% above its August 29 closing price of $89.33

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 26 three months ago

Press Release: ID:nGNX3l977w