TLDR
- HealthEquity stock surged over 9%, reaching an all-time high of $115.64.
- Q1 FY26 revenue rose 15% to $331.9 million, beating expectations.
- EPS came in at $0.97 vs. a forecast of $0.82.
- Adjusted EBITDA climbed 19% to $140.2 million.
- Analysts maintained bullish ratings; KeyBanc and BTIG kept Overweight/Buy.
HealthEquity, Inc. (NASDAQ: HQY) stock surged 9.12% to $113.22 as of mid-morning trading on June 4, 2025, following the release of strong fiscal Q1 2026 earnings.
The stock briefly touched a record high of $115.64. The company’s solid quarterly performance and forward-looking strategy have boosted investor confidence, contributing to a 35.43% one-year return.
Earnings Beat Expectations in Q1 FY26
HealthEquity posted revenue of $331.9 million for the quarter ended April 30, 2025, a 15% increase from the prior year. EPS stood at $0.97, surpassing the consensus estimate of $0.82.
Adjusted EBITDA reached $140.2 million, up 19% year-over-year, signaling strong operational leverage. The company’s HSA assets rose 15%, while the number of HSA members who invest grew 16%.
HealthEquity $HQY Q1 FY26 Earnings
– Revenue: $331M (+15% YoY)
– GAAP Net Income: $54M (+87%) | EPS: $0.61
– Non-GAAP Net Income: $86M (+22%) | EPS: $0.97
– Adjusted EBITDA: $140M (42% margin, +19%)
– HSA Accounts: 9.9M (+9%) | Total Accounts: 17.1M (+7%)
– HSA Assets: $31.3B… pic.twitter.com/ybnliDNezB— MLQ.ai (@mlqai) June 3, 2025
Analyst Reactions and Price Targets
Several analysts reacted positively to the results. KeyBanc maintained an Overweight rating, and BTIG reaffirmed its Buy rating with a price target of $130. Citizens JMP lifted its price target to $117, also keeping a Market Outperform stance. However, Goldman Sachs remained cautious, sticking to a Neutral rating and a $104 target due to moderating HSA growth.
AI Investment, Fraud Cost Reduction, and Challenges
HealthEquity continues to invest in technology to improve service efficiency. Its AI-powered claims processing and chat support are enhancing member satisfaction and reducing processing time. Fraud-related service costs dropped significantly from $11 million in Q4 to $3 million in Q1.
However, fraud reimbursement still weighs on expenses. The company also faces challenges in increasing app usage, with just 1.2 million downloads among 9.9 million members.
Outlook and Risks
While HealthEquity’s fundamentals remain strong, new HSA sales declined due to weaker macroeconomic conditions. There is also lingering uncertainty around pending legislative changes that may affect the HSA market.
The company is cautious about the broader economy’s effect on employment and GDP growth, both of which influence account growth.
Performance vs. Benchmark
HealthEquity’s long-term returns continue to outperform the S&P 500. Its Year to date return stands at 17.72% compared to the S&P 500’s 1.67%. Over three and five years, HQY has delivered 76.32% and 93.77%, respectively, surpassing the benchmark in both periods.
Momentum Backed by Long-Term Strategy
HealthEquity’s sustained growth reflects its focus on expanding health financial services and improving digital tools. With consistent earnings strength and strategic investments, the company is positioning itself as a long-term leader in the evolving healthcare finance space.
