Fundamental Analysis
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Reasons to buy – HEALTHEQUITY
High level decisions on buy or sell for a stock should be driven by
1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.
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- Here we see HEALTHEQUITY makes a margin of 59% on Gross Level and about 21% on Net level. This means that out of $1 that it makes $0.21 is being pocketed as profits.
2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.
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- Here we see net revenue growth of 29% in the revenue and the net profit figures grew by 80%. This substantial growth in the profits is coming from the increase in the Net Margins.
3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.
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- Here we see HEALTHEQUITY makes a Return on Assets of 51% and Return of Equity of 55% which is pretty good.
Good quality companies like this which pass all the barriers with flying colors are the stocks that we should focus on rather than the ones that are continuously talked about on CNBC.
GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.
All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by HEALTHEQUITY to the SEC. All the data on the above analysis can be found at the link below
Balance Sheet
Income Statement
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