KeyBanc analysts increased their price target on HealthEquity (NASDAQ:HQY) to $95 from $85, keeping an Overweight rating.

The analysts shared insights from a recent conference with HealthEquity’s management, coming after the company reported impressive earnings, particularly in terms of profitability. The analysts adjusted estimates upward, considering higher custodial yields, with enhanced rate products now exceeding 30% and expected to rise to around 60% by 2027 or sooner.

The analysts believe HealthEquity is strategically positioned for growth by expanding its share in the Health Savings Accounts market, both organically and through strategic acquisitions, enhancing its rate business, and utilizing AI to bolster its financial performance.

The analysts argued that the company’s high-margin HSA assets, which contribute to a strong cash position, justify the potential for multiple expansion, supporting his Overweight rating.

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