HealthEquity Inc (HQY) Growth Acceleration; Raising Ests, PT - Leerink

Leerink Partners analyst, Steven Wardell, raised his estimates and price target on HealthEquity, Inc (NASDAQ: HQY) to reflect the high end of management's new guidance after HealthEquity posted a strong beat and raise to start off FY17.

HQY reported 1Q17 revenue of $44M for the quarter, up 47% y/y, and above consensus by $2.1M or 5%. The beat was driven by HSA account growth of 51% y/y, and stronger than expected Interchange fees – 29% higher than expected. Mgmt raised full-year guidance for FY17 from $172M at the midpoint to $175M implying y/y growth of 38%. Members were up 51% and Assets Under Management were up 61%, with F2016-17 showing an acceleration over F2015-16.

Non-GAAP EPS for the quarter were $0.15, beating consensus by $0.02 or 19%. The beat was attributable to topline strength, GM expansion, and operating leverage. Adj. EBITDA margin improved 468bps y/y to a record 40.9%. Mgmt tweaked up FY17 Adj. EBITDA guide increased from $57m to $59m at midpoints. EPS guidance was raised from $0.46 at the midpoint to $0.48 vs. consensus at $0.46.

The firm raised its price target to $33 from $30.

For an analyst ratings summary and ratings history on HealthEquity, Inc click here. For more ratings news on HealthEquity, Inc click here.

Shares of HealthEquity, Inc closed at $27.61 yesterday.

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