Healthequity (HQY – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Allen Lutz from Bank of America Securities reiterated a Buy rating on the stock and has a $93.00 price target.
Allen Lutz has given his Buy rating due to a combination of factors that indicate a strong growth potential for HealthEquity. The company’s strategy, as presented during their Investor Day, aims to outpace market growth and double adjusted EPS within the next three years. This ambitious target is underpinned by HealthEquity’s plans for capital deployment, which include mergers and acquisitions within their portfolio as well as fostering internal innovations, like their new cost transparency tool and digital consumer-directed benefits (CDB) cards. These initiatives are expected to minimize risk and provide HealthEquity with opportunities to benefit from their new investments. Additionally, the company’s focus on leveraging data integrations within its partnership ecosystem is likely to enhance member outcomes and further strengthen its competitive position in the Health Savings Account (HSA) sector.
Furthermore, HealthEquity provided insights into their Enhanced Yield strategy, which is poised to increase adoption rates significantly by automatically enrolling new members and moving existing consumers to the product unless they opt out. The ability to generate a higher yield on these products compared to their basic offering is anticipated to contribute to the goal of doubling adjusted EPS. Lutz’s confidence is bolstered by the company’s transparent roadmap to this target, including higher custodial yields, growth in new accounts and assets, and improved service cost management. These elements, combined with a reasonable expectation of ongoing share repurchases, lead to an updated forecast for higher earnings in the coming years, justifying the Buy rating and the positive outlook for HealthEquity’s stock.
Lutz covers the Healthcare sector, focusing on stocks such as Walgreens Boots Alliance, Healthequity, and Teladoc. According to TipRanks, Lutz has an average return of -2.7% and a 52.56% success rate on recommended stocks.
In another report released yesterday, Barclays also assigned a Buy rating to the stock with a $104.00 price target.
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Healthequity (HQY) Company Description:
HealthEquity, Inc. provides range of solutions for managing health care accounts. The firm’s offers its solutions for employers, health planbs, brokers, consultants and financial advisors. Its services include HAS, FSA, HRA, DCRA, 401(k), Commuter, COBRA and HIA. It also offers products like healthcare saving and spending platform, health savings accounts, investment advisory services, reimbursement arrangements, and healthcare incentives. The company was founded by Stephen D. Neeleman on September 18, 2002 and is headquartered in Draper, UT.
Read More on HQY:
- HealthEquity Reports Year-End Sales Metrics
- HealthEquity price target raised to $93 from $85 at BofA
- HealthEquity Recognized by Glassdoor as a Top U.S. Workplace for 2024
- Wells says key metrics tracking ahead as HealthEquity provides sales outlook
- HealthEquity Announces Year-End HSA Sales Outlook; Presentation at J.P. Morgan Healthcare Conference; Investor Day
