📈 Resilient Trader Trade Idea: The Healthcare Tailwind Powering HealthEquity (HQY)

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Every week, we cut through the noise and surface opportunities institutions are already eyeing, with strategies tailored for retail traders. Today’s setup is a financial technology company poised to ride the wave of rising healthcare costs.

What you’ll get today:

• Why HealthEquity is attractive at current levels

• A stock buy idea plus an income-generating options approach

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🔍 Trade Thesis: Riding the Healthcare Cost Tsunami with HealthEquity

HealthEquity (HQY) is the largest Health Savings Account provider in the United States. We believe it is positioned to benefit from rising healthcare costs and a higher-for-longer rate environment.

Behind the scenes:

🚨 Accelerating HSA adoption. Rising insurance costs push employers and consumers toward high-deductible plans with HSAs. We expect HSA account growth to accelerate in 2025.

📈 Rising interest revenue. Roughly $5B in custodial assets are rolling from about 1.72% yields to the mid-4% range, which lifts custodial revenue.

🌎 Category leadership. As the top HSA custodian by account count, HQY is positioned to capture outsized share.

📊 The Fundamentals

Recent highlights:

💰 Revenue: $325.8M in Q2 FY2025, up 9% year over year

📈 Net income: $59.9M, up 67% year over year

📉 HSA assets: $33.1B, up 12% year over year

🏦 Accounts: 10.0M HSAs, up 6% year over year

📌 Margins: Record gross margin of 71%

💎 Valuation Snapshot

⚖️ Forward P/E: 27.3x

🏷️ PEG ratio: 1.09

📈 Growth outlook: Earnings projected to grow faster than the S&P 500

🧭 Technical Context

✅ Price above the 10, 20, 30, and 50-day moving averages

✅ Short-term trend is bullish

✅ Spot reference: $95.86

✅ Price objectives: $100 initial, $110 intermediate

💥 Trade of the Week

🟢 Stock:

• Buy HQY around $94.78

🛡️ Options income:

• Sell the November 21 $90 cash-secured put for about $1.9

  • Premium received: $190 per contract

  • If assigned, effective stock cost: $88.10

  • Playbook: Continue selling roughly 30-day, 30-delta puts each month until shares reach $100

🚀 Catalysts

1. Earnings updates with revenue growth and margin expansion

2. HSA adoption data and employer plan mix

3. Interest rate environment supporting custodial yields

4. Policy updates that expand HSA eligibility and contributions

🛑 Risk Management

• Initial stop loss reference: $85.00 on shares

• Sizing suggestion: Keep any single idea to a small percentage of portfolio risk

• Know assignment risk on short puts

🧠 Final Take

HQY offers quality, leadership, and a multi-year growth runway. Rising healthcare costs, accelerating HSA adoption, and supportive yields create a compelling setup. The blend of a core equity position with put-selling can improve entry price and generate income while you wait.

✅ Buy $HQY ( ▲ 0.97% ) around $943.78(at the time of this writing)
💸 Sell the Nov 21 $90 put near $2.90

We will keep an eye on this one.

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