Over the past few days HealthEquity (HQY 2.31%) shares have been rather sickly. The health savings account (HSA) specialist's stock was rocked by a disappointing earnings report, and as a result its price was down by nearly 15% week to date as of mid-afternoon Thursday, according to data compiled by S&P Global Market Intelligence.
A mixed fourth quarter
HealthEquity divulged its fourth-quarter and full-year fiscal 2024 results just after market close on Tuesday. These showed that the company earned $311.8 million for the period ended Jan. 31, representing a year-over-year increase of 19%. Non-GAAP (adjusted) net income also saw a rise, improving by 11% to $61.3 million. On a per-share basis, that figure was $0.69.
This meant a mixed quarter for HealthEquity. While it beat the average analyst estimate of $305.8 million for revenue, it fell short of the consensus $0.72 projection for adjusted profitability.
In the earnings report, management attributed its improvements largely to volume. It said that it added a record 1 million new HSAs in fiscal 2024 to 9.9 million. Total HSA assets amounted to $32.1 billion at the end of that year, for an increase of 27% over fiscal 2023.
NASDAQ: HQY
Key Data Points
Single-digit surprise
HealthEquity also proffered guidance for the entirety of fiscal 2025. The company is forecasting revenue of $1.28 billion to $1.305 billion; the high end of the range is 9% above the fiscal 2024 tally, which is somewhat disappointing given the past quarter's double-digit improvement. That $1.31 billion also sits below the consensus analyst expectation of $1.309 billion.
Adjusted net income, meanwhile, should come in at $318 million to $333 million, or $3.57 to $3.74 per share. Although the former projection is at least 15% higher than the actual fiscal 2024 result, on a per-share basis it doesn't quite reach the $3.76 collective projection from pundits.
While I think HealthEquity is in a good and potentially long-term lucrative business, that anticipated revenue growth slowdown is concerning. Hopefully management will be able to get the double-digit growth train running again.
