Analyst Estimates: Here's What Brokers Think Of HealthEquity, Inc. (NASDAQ:HQY) After Its First-Quarter Report

Last week, you might have seen that HealthEquity, Inc. (NASDAQ:HQY) released its quarterly result to the market. The early response was not positive, with shares down 3.7% to US$81.44 in the past week. Revenues were in line with expectations, at US$184m, while statutory losses ballooned to US$0.03 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for HealthEquity

Taking into account the latest results, the most recent consensus for HealthEquity from 14 analysts is for revenues of US$761.1m in 2022 which, if met, would be a reasonable 4.6% increase on its sales over the past 12 months. The company is forecast to report a statutory loss of US$0.11 in 2022, a sharp decline from a profit over the last year. Before this latest report, the consensus had been expecting revenues of US$755.8m and US$0.058 per share in losses. So it's pretty clear the analysts have mixed opinions on HealthEquity even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

The consensus price target held steady at US$85.55, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic HealthEquity analyst has a price target of US$94.00 per share, while the most pessimistic values it at US$68.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that HealthEquity's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2022 being well below the historical 36% p.a. growth over the last five years. Compare this to the 192 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.2% per year. Factoring in the forecast slowdown in growth, it looks like HealthEquity is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at HealthEquity. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$85.55, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for HealthEquity going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for HealthEquity (1 is concerning!) that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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