HealthEquity's Earnings Momentum Deserves More Credit

HealthEquity is the leading HSA and consumer-directed benefits (CDB) administrator, consistently beating revenue and EPS expectations with strong operational execution. HQY's fiscal 2027 revenue is guided to $1.41–$1.42 billion, with robust HSA asset growth, margin expansion, and accelerating buybacks supporting a Buy rating. Custodial yield remains resilient at 3.84%, supported by rate locks through 2029, while automation and AI investments drive significant cost efficiencies. Valuation at 20x forward earnings and 13.7x EV/EBITDA appears conservative given visible growth, margin leverage, and capital return momentum.

HealthEquity (HQY) holds a solid spot right now at the top of the HSA and consumer-directed benefits (CDB) administration business, a market that just keeps getting bigger. The company has beaten expectations.