HealthEquity (HQY) Stock Forecast & Price Target

HealthEquity Inc. demonstrated robust financial performance in the second quarter, with total revenue rising by 8.6% year-over-year to $325.8 million, driven largely by a notable 15.3% increase in custodial revenue, which totaled $159.9 million. The company's managed health savings accounts (HSAs) reached an impressive $17.035 billion in cash, while investments in HSAs soared by 24% year-over-year, indicating strong growth in consumer adoption and utilization. Additionally, interchange revenue grew by 8% to $48.1 million, reflecting an increase in both total accounts and spending per account, further underscoring HealthEquity's positive trajectory in the consumer-directed benefits market.

HealthEquity's stock presents a concerning outlook, trading at a lower valuation multiple than its high-growth SaaS peers, with a current price-to-revenue ratio of 6.4x FY/26 estimates compared to the peer average of 7.6x. The company is exhibiting slightly declining financial performance expectations, as evidenced by a reduced adjusted EBITDA forecast for FY/27, now projected at $617.5 million, which is below previous estimates. Moreover, ongoing risks including increased competition and potential regulatory changes may further hinder HealthEquity's ability to achieve sustainable growth in the evolving healthcare savings and spending market.