HealthEquity's Q4 revenue rises, slightly beating estimates

Overview

• U.S. HSA administrator's fiscal Q4 revenue rose 7%, slightly beating analyst expectations

• Adjusted EBITDA for fiscal Q4 beat estimates, rising 23% year-over-year

• Net income for fiscal Q4 missed analyst expectations

Outlook

• HealthEquity sees fiscal 2027 revenue between $1.405 bln and $1.415 bln

• Company expects fiscal 2027 net income of $239 mln to $246 mln

• HealthEquity expects fiscal 2027 Adjusted EBITDA of $618 mln to $628 mln

Result Drivers

• HSA GROWTH - Co said record new HSA sales and higher total HSA assets contributed to revenue growth

• MARGIN EXPANSION - Adjusted EBITDA margin expanded more than 500 basis points to 40%, reflecting operating leverage, per CEO Scott Cutler

• CUSTODIAL AND SERVICE REVENUE - Higher custodial and service revenue supported overall revenue increase

Company press release: ID:nGNX22SGVX

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 14 "strong buy" or "buy", 1 "hold" and 1 "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 $123.50, about 57% above its March 16 closing price of $78.67

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 24 three months ago

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