Reasons to Hold HealthEquity Stock in Your Portfolio for Now

Core Insights - HealthEquity, Inc. (HQY) is experiencing growth driven by its business model and strategy, particularly in Health Savings Accounts (HSAs), despite facing data security threats [1][8] - The company's shares have declined 7% year-to-date, underperforming the industry and contrasting with a 9.5% increase in the S&P 500 [1] Company Performance - HealthEquity has a market capitalization of $8.04 billion and projects a 20.8% growth over the next five years [2] - The company has surpassed earnings estimates in three of the last four quarters, with an average surprise of 12.41% [2] HSA Growth - As of April 30, 2025, HealthEquity managed 9.9 million HSAs, a 9% increase year-over-year, with 770,000 HSAs having investments, up 16% [3] - Total HSA assets reached $31.3 billion, reflecting a 15% year-over-year increase, including $17.1 billion in HSA cash (up 7.5%) and $14.2 billion in HSA investments (up 24.6%) [4] Technological Advancements - The company's focus on AI and mobile-first strategies is enhancing efficiency and engagement, with over 1.2 million app downloads and a shift to secure app-based access [5] - AI-driven systems are improving claims processing and reducing call volumes, contributing to member satisfaction and operational efficiency [5] Recent Financial Results - HealthEquity reported strong first-quarter fiscal 2026 results, with significant growth in both top and bottom lines, and a reduction in fraud-related costs from $11 million to $3 million [6][7] - The company added 150,000 new HSA accounts in the first quarter, contributing to the overall growth in total HSA assets [6] Estimate Trends - There has been a positive revision trend for fiscal 2026 earnings estimates, with the Zacks Consensus Estimate for EPS increasing by 3 cents to $3.73 [9] - The consensus estimate for second-quarter fiscal 2026 revenues is $318.8 million, indicating a 6.3% rise year-over-year, while EPS is expected to improve by 6.9% [9]