Please ensure Javascript is enabled for purposes of website accessibility

Why HealthEquity Stock Is Sinking Today

By Brian Feroldi - Mar 9, 2020 at 11:33AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares drop by double digits during a tough day on Wall Street. Is this just market noise, or is something else going on?

What happened

Shares of HealthEquity (HQY 0.06%), a leading provider of managed healthcare accounts, fell as much as 12% on Monday. The stock was down about 11% as of 11:03 a.m. EDT.

So what

There wasn't a single press release, SEC filing, or analyst downgrade that could justify the double-digit decline. That makes it likely that HealthEquity's stock is simply being sold along with the rest of the market today due to the growing concerns of the spread of COVID-19 (which is more commonly known as the coronavirus) and the shock to the oil markets over the weekend.

Businessman looking stressed at computer with cups of coffee everywhere.

Image source: Getty Images.

HealthEquity is most likely dropping more than the market indices because it is a growth stock that trades at a premium valuation. During times of market volatility, stocks that trade at high valuations tend to fall more than the market as a whole.

Now what

HealthEquity is set to report its year-end results on Monday, March 16. Investors were given a sneak peak at the numbers in mid-February and, as usual, there was a lot to like. Revenue and adjusted EPS are both expected to come in above management's previously communicated guidance range, which suggests that the company continues to execute at a high level.

Meanwhile, HealthEquity's stock has been beaten up recently. Shares are down more than 36% from their February highs, even though the company hasn't issued any negative news during that time. If you believe in HealthEquity's long-term potential, this might be a great time to add a few shares to your portfolio.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

HealthEquity, Inc. Stock Quote
HealthEquity, Inc.
HQY
$66.85 (0.06%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.