HealthEquity carries $933.14 million in debt, with a debt-to-equity ratio of 0.54, which is reasonable for its industry. The company boasts a current ratio of 2.41, indicating strong liquidity and the ability to meet its financial obligations as they come due. While debt can be a strategic tool for growth, HealthEquity's net profit margin is just 0.1%, suggesting the need for a more competitive strategy. Even a slight dip in revenue could wipe out profits, leading to losses. This margin is significantly below average. Similarly, the net operating margin stands at 0.2%, meaning the company earns just $0.2 in operating income for every $100 of revenue.
Critical Takeaways
Considering HealthEquity's strategic growth potential, leveraging their strong cash position of 404M might provide a robust opportunity for expansion, especially if they choose to increase their capital lease obligations, currently at 58.2M, to fund new initiatives. This move could enhance their market position in the Health Information Services industry, provided the increased debt is managed effectively to avoid undue financial strain.When opportunity knocks, companies often consider leveraging debt to fuel growth, and HealthEquity might be gearing up for just that. With cash reserves standing at $404 million and total current liabilities at $117.1 million, the company is in a solid position to contemplate expanding its debt. This strategic move could potentially bolster its market standing in the health information services sector. Despite a cost of revenue of $376.9 million, HealthEquity's operating income of $128.1 million suggests that it is managing its expenses effectively. As it navigates this path, investors will be keen to see if the expected forecast value of $95.36 aligns with analyst target prices, indicating whether the potential debt expansion will indeed drive future growth. HealthEquity is set to release its earnings today. Currently, the company's Days Payables Outstanding remains steady compared to last year. Looking ahead to 2024, the Return on Tangible Assets is expected to increase to 0.13, while Days Sales Outstanding is projected to decrease to 30.22. With growing interest in the healthcare providers and services sector, it's worth considering HealthEquity as a potential investment opportunity.
The asset allocation of funds such as Fuller Thaler usually varies among a different mix of asset classes. Balanced mutual funds invest not only in bonds, which focus primarily on income, and stocks, which aim for investment growth, but also keep some reserve in cash or even exotic instruments. Below we show the current asset allocation of Fuller Thaler Behavioral
HealthEquity reported the last year's revenue of 999.59
M. Total Income to common stockholders was 55.71
M with profit before taxes, overhead, and interest of 490.09
M.
Liabilities Breakdown
| Total Current Liabilities | 78.99 Million |
| Liabilities And Stockholders Equity | 1.62 Billion |
| Non Current Liabilities Total | 571.44 Million |
| Non Current Liabilities Other | 18.31 Million |
Warren Buffett once said, "The more you learn, the more you earn," and HealthEquity (HQY) seems to be gearing up for a strategic leap forward.
With a solid net asset base of $3.16 billion and a manageable debt-to-equity ratio of 0.54%, the company appears well-positioned to consider expanding its debt in January for growth initiatives. Despite its total debt of $933.14 million, HealthEquity's cash flow from operations stands strong at $242.83 million, suggesting it has the financial flexibility to support potential expansion plans. The company's beta of 0.52 indicates lower volatility compared to the broader market, which could appeal to risk-averse investors looking for stability in the Health Information Services sector. As HealthEquity navigates its fiscal strategies, the high institutional ownership of 97.94% reflects strong confidence from major investors, potentially signaling a promising outlook for the stock..
HealthEquity has a small chance to finish above $102 in 2 months
HealthEquity's stock currently exhibits a mean deviation of 1.43, indicating relatively stable price movements. This suggests that while the stock isn't experiencing major swings, it also might not see significant gains in the near future. Consequently, the chances of HealthEquity's stock price exceeding $102 in the next two months seem low. Investors should manage their expectations for short-term gains and instead focus on the company's long-term growth and financial stability.
The stock's low volatility is further reflected in its skewness of 1.34 and kurtosis of 6.42. Understanding these volatility metrics can help investors make informed decisions. During bear markets, increased volatility can affect HealthEquity's stock price, prompting investors to adjust their portfolios as prices drop.
Our Final Take On HealthEquity
While many other companies within the health information services industry are still a little expensive, even after the recent corrections, HealthEquity may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor quit any shares of HealthEquity at this time. The HealthEquity risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to HealthEquity.
Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Fuller Thaler Behavioral. Please refer to our
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