Here’s a look at the key numbers from the company’s third quarter:
Revenue jumped 24% to $70.5 million. That was ahead of the $69.8 million in revenue that Wall Street had expected.
HSA membership grew 22% to 3.7 million.
Custodial assets under management grew 27% to $7.1 billion.
GAAP net income soared 50% to $15.7 million, or $0.25 per share.
Non-GAAP net income grew 64% to $0.28. That was ahead of the $0.25 that Wall Street expected.
Image source: Getty Images.
The upbeat third-quarter results caused management to boost full-year guidance, too:
Revenue is now expected to land between $281 million and $285 million. That represents a $2 million bump from the bottom end of management’s prior guidance range.
Net income is expected to be in the range of $66 million to $70 million, or $1.03 to $1.09 per share.
Non-GAAP net income is expected to land between $68 million and $72 million, or $1.06 to $1.13 per share. Management had previously guided for $1.05 to $1.11 in non-GAAP EPS.
So if the quarterly results were good and management boosted guidance, why are shares falling today? The most likely answer is that Wall Street was expecting an even larger increase to guidance. Market watchers are currently expecting $284.3 million in sales and $1.12 in non-GAAP EPS for the full year. Traders are likely knocking down the share price because the midpoint of management’s range is a bit shy of these estimates.
I think there’s an argument to be made that Wall Street is missing the forest for the trees today. HealthEquity’s third-quarter results showed double-digit revenue growth, margin improvements, and a 64% jump in adjusted earnings. Those are fantastic numbers in absolute terms and help to reaffirm the bull case for owning this stock.
Overall, my view is that HealthEquity’s growth story is still very much intact. With shares currently trading at a discount, I think it is a great time for growth-focused investors to buy into this exciting growth story .
10 stocks we like better than HealthEquity
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and HealthEquity wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Go to Appearance > Customize > Subscribe Pop-up to set this up.
Wealth Empire Newsletter
Register now for free updates and alerts
Note: I have the ability to revoke this permission at any time and ask for the removal of my personal data collected by contacting us or simply clicking Unsubscribe.