HealthEquity (NASDAQ:HQY), a custodian for health savings accounts, is set to announce its earnings on Tuesday, June 3, 2025. Historically, the stock has demonstrated a strong likelihood of positive returns following its earnings announcements. Over the last five years, HQY has experienced a positive one-day return after earnings in 70% of cases, with a median increase of 3.4% and a peak one-day rise of 11.6%.
For traders focused on events, understanding these historical trends can be beneficial, although actual results will significantly impact stock performance. There are two main strategies to consider:
- Pre-Earnings Positioning: You can assess the historical probabilities and consider entering a position before the earnings announcement.
- Post-Earnings Positioning: Alternatively, you can investigate the relationship between immediate and medium-term returns after the earnings are released and then adjust your position accordingly.
Analysts expect HealthEquity to report earnings of $0.81 per share on revenue of $322 million. This is an increase compared to the previous year’s quarter, which recorded earnings of $0.80 per share on revenue of $288 million. From a fundamental view, HealthEquity currently boasts a market capitalization of $8.7 billion. Over the past twelve months, the company generated $1.2 billion in revenue and was operationally profitable, reporting $203 million in operating profits and a net income of $97 million. Therefore, if you are looking for growth with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative—having outperformed the S&P 500 and delivering returns exceeding 91% since its inception. Additionally, see – Buy, Sell, or Hold HIMS Stock?
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HealthEquity Stock’s Historical Chances of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 14 positive and 6 negative one-day (1D) returns observed. In total, positive 1D returns were noted about 70% of the time.
- Significantly, this percentage rises to 92% when considering data from the last 3 years instead of 5.
- The median of the 14 positive returns = 3.4%, while the median of the 6 negative returns = -6.3%
Additional data for 5-Day (5D) and 21-Day (21D) returns observed post-earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (although not effective if the correlation is low) involves understanding the correlation between short-term and medium-term returns following earnings, identifying a pair with the highest correlation, and executing the appropriate trade. For instance, if 1D and 5D exhibit the highest correlation, a trader can take a “long” position for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Discover more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three: the S&P 500, S&P mid-cap, and Russell 2000), delivering strong returns for investors. Furthermore, if you’re seeking upside with a more stable performance than an individual stock like HealthEquity, consider the High Quality portfolio, which has outperformed the S&P and achieved returns greater than 91% since its inception.
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