HealthEquity Inc. Common Stock (HQY) fair value

ACCE thesis

HealthEquity administers health savings accounts (HSAs) and related benefits, earning custodial and transaction fees on the assets it holds for employers and their employees. The moat is the platform itself: once an employer and its workforce are enrolled, switching custodians is costly and rare, and that stickiness shows up in a 71.2% gross margin and a 28.4% operating margin. Revenue growth of 7.6% is steady rather than explosive, and the forward P/E of 19.7 against a trailing 33.5 suggests the market expects earnings to catch up with that top line. At a $7.7B market cap with no index membership, the name sits in a space where coverage is thinner and mispricings can persist, which makes it worth a closer look at whether the margin profile is durable and how much of the earnings step-up the consensus has already priced in. ROE of 11.4% is the figure to pressure-test, since it is modest for a business with margins this high.