HealthEquity (HQY) Stock Forecast & Price Target

HealthEquity Inc. has demonstrated a strong financial performance, with total revenue growing by 8.6% year-over-year to reach $325.8 million in Q2/26, driven primarily by a substantial increase in custodial revenue which rose by 15.3% to $159.9 million. The company also reported an increase in health savings account (HSA) cash, totaling $17.035 billion, and a remarkable growth in HSA investments, which reached $16.1 billion—up 24% year-over-year. Additionally, interchange revenue increased by 8.0%, reflecting both an expansion in total accounts and higher spending per account, underscoring the company’s positive trajectory and robust demand for its services.

HealthEquity's stock is trading at a lower valuation compared to both its high-growth SaaS peer group and its own historical averages, at 6.4x its updated FY/26 revenue estimate and 15.1x its adjusted EBITDA estimate, which raises concerns about its growth potential. The company's projected FY/27 adjusted EBITDA has been revised down to $617.5 million, reflecting a slowdown in earnings growth compared to previous estimates, despite a stable revenue forecast of $1.427 billion. Additionally, risks such as increasing competition, falling interest rates, and changes in the regulatory environment could further hinder the company's performance and investor confidence.