The presidential election on Tuesday could shift the federal government's stance considerably on health care. HealthEquity, which got an IBD rating upgrade Monday, provides a platform where consumers can access their tax-advantaged health care savings plans. The highly-ranked company could face significant changes as a result of the election. HealthEquity stock rose Tuesday afternoon.
While specific changes are hard to ascertain ahead of the election, a recent report provides clues.
As reported in the Wall Street Journal, Vice President Kamala Harris has said she would "crack down on pharmaceutical companies with noncompetitive business practices." Meanwhile, former President Donald Trump "has pledged to bring down prescription drug costs but hasn't said how exactly he would do that." Which of those two strategies health services company will face won't be known until Tuesday night at the earliest.
HealthEquity Sales, Profits Climb; Ratings High
HealthEquity, which bills itself on its website as "The #1 Health Savings Account (HSA) Administrator" saw both earnings and sales growth rise last quarter. Earnings-per-share growth increased from 60% to 62%, or 86 cents per share. Its revenue growth rate climbed 23%, up from 18%, to $299.9 million.
HealthEquity uses artificial intelligence to track how people with HSA plans save, spend and invest in their plans.
Meanwhile, among its other ratings, HealthEquity boasts a 91 EPS Rating out of 99, putting it in the top 9% of stocks for recent and long-term profit growth, It has a near-perfect 96 Composite Rating and a C+ Accumulation/Distribution Rating, showing that big funds are buying more of its shares than selling.
On Monday, HealthEquity reached an important technical milestone, with its Relative Strength (RS) Rating climbing into the 80-plus percentile with an upgrade to 82, up from 75 the day before.
The upgraded 82 RS Rating shows that Draper, Utah-based HealthEquity topped 82% of all stocks for price performance this past year. It's a major accomplishment because research shows that the best stocks typically have an RS Rating north of 80 as they launch their biggest climbs.
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Can HQY Rise Above Consolidation Pattern?
HealthEquity stock has been consolidating since the end of June. During that time it rose from a 65.01 intraday low on Aug. 5 to a more-than-three-year high at 89.23 on Oct. 21 before settling back again. Monday afternoon HealthEquity traded above 86, up fractionally for the day and about 33% higher than the June low. Keep in mind that the latest consolidation is a later-stage base. Those can succeed but involve more risk than earlier stage bases.
HealthEquity holds the No. 2 rank among its peers in the 22-stock Commercial Services-Outsourcing industry group. ExlService Holdings is the No. 1-ranked stock in the group.
The proprietary IBD Relative Strength Rating identifies technical performance by showing how a stock's price movement over the last 52 weeks measures up against that of other stocks on the major indexes.
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