Oppenheimer analyst Mohan Naidu maintained a Buy rating on Healthequity (NASDAQ: HQY) today and set a price target of $85. The company’s shares closed yesterday at $76.36, close to its 52-week high of $78.10.
Naidu commented:
“HealthEquity beat estimates at $69.9M/$0.31 vs. consensus of $68.8M/$0.28. The company continues to increase market share with record 98K new accounts in the quarter. Custodial revenue continues to impress with 47% y/y growth benefiting from HSA member growth and interest rate yield. Further expansion of solutions to provide a comprehensive solution set for employers and move toward middle market significantly expands the market opportunity. We’re getting into egregious, unheard of valuation levels that will likely make the stock volatile, but the secular trend in HSA adoption, increasing interest rate environment and potential for regulatory action that could further drive HSA penetration makes this stock enviable and continue to work. Reiterate Outperform, increasing target to $85 (from $68).”
According to TipRanks.com, Naidu is a 5-star analyst with an average return of 10.8% and a 57.4% success rate. Naidu covers the Services sector, focusing on stocks such as Tivity Health Inc, Hms Holdings Corp, and Express Scripts.
Currently, the analyst consensus on Healthequity is Strong Buy and the average price target is $71.63, representing a -6.2% downside.
In a report issued on May 23, Merrill Lynch also initiated coverage with a Buy rating on the stock with a $83 price target.
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Based on Healthequity’s latest earnings release for the quarter ending April 30, the company reported a quarterly net profit of $22.58 million. In comparison, last year the company had a net profit of $14.03 million.
Based on the recent corporate insider activity of 104 insiders, corporate insider sentiment is negative on the stock.
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HealthEquity, Inc. engages in the provision of healthcare saving solutions. Its products include healthcare saving and spending platform, health savings accounts, investment advisory services, reimbursement arrangements, and healthcare incentives.
