HealthEquity: Compounding Flywheel Reveals Attractive Entry Point

HealthEquity is a leading HSA administrator, benefiting from rising healthcare costs and recent legislative tailwinds expanding its addressable market. Revenue grew 9% in FY2026 to $1.313 billion, with significant margin expansion and a standout 17% growth in custodial revenue driven by enhanced rate migration. Management projects further yield increases in FY2027, and a major low-yield contract expiry is set to boost custodial revenue meaningfully.