WallStSmart

HealthEquity Inc (HQY)vsR1 RCM Inc (RCM)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

R1 RCM Inc generates 88% more annual revenue ($2.46B vs $1.31B). HQY leads profitability with a 16.4% profit margin vs -2.5%. HQY appears more attractively valued with a PEG of 1.19. HQY earns a higher WallStSmart Score of 66/100 (B-).

HQY

Strong Buy

66

out of 100

Grade: B-

Growth: 8.0Profit: 7.0Value: 6.7Quality: 6.5
Piotroski: 4/9

RCM

Hold

39

out of 100

Grade: F

Growth: 6.0Profit: 3.0Value: 6.3Quality: 5.0
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

HQYUndervalued (+54.4%)

Margin of Safety

+54.4%

Fair Value

$168.62

Current Price

$83.25

$85.37 discount

UndervaluedFair: $168.62Overvalued
RCMUndervalued (+47.9%)

Margin of Safety

+47.9%

Fair Value

$27.45

Current Price

$14.31

$13.14 discount

UndervaluedFair: $27.45Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

HQY2 strengths · Avg: 9.0/10
EPS GrowthGrowth
92.4%10/10

Earnings expanding 92.4% YoY

Operating MarginProfitability
21.6%8/10

Strong operational efficiency at 21.6%

RCM1 strengths · Avg: 8.0/10
Price/BookValuation
2.1x8/10

Reasonable price relative to book value

Areas to Watch

HQY1 concerns · Avg: 4.0/10
P/E RatioValuation
33.5x4/10

Premium valuation, high expectations priced in

RCM4 concerns · Avg: 2.8/10
PEG RatioValuation
2.064/10

Expensive relative to growth rate

Operating MarginProfitability
3.8%3/10

Operating margin of 3.8%

Return on EquityProfitability
-2.2%2/10

ROE of -2.2% — below average capital efficiency

EPS GrowthGrowth
-99.3%2/10

Earnings declined 99.3%

Comparative Analysis Report

WallStSmart Research

Bull Case : HQY

The strongest argument for HQY centers on EPS Growth, Operating Margin. Profitability is solid with margins at 16.4% and operating margin at 21.6%. PEG of 1.19 suggests the stock is reasonably priced for its growth.

Bull Case : RCM

The strongest argument for RCM centers on Price/Book. Revenue growth of 14.7% demonstrates continued momentum.

Bear Case : HQY

The primary concerns for HQY are P/E Ratio.

Bear Case : RCM

The primary concerns for RCM are PEG Ratio, Operating Margin, Return on Equity.

Key Dynamics to Monitor

HQY profiles as a mature stock while RCM is a turnaround play — different risk/reward profiles.

RCM carries more volatility with a beta of 0.84 — expect wider price swings.

RCM is growing revenue faster at 14.7% — sustainability is the question.

HQY generates stronger free cash flow (102M), providing more financial flexibility.

Bottom Line

HQY scores higher overall (66/100 vs 39/100), backed by strong 16.4% margins. RCM offers better value entry with a 47.9% margin of safety. Both earn "Strong Buy" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

HealthEquity Inc

HEALTHCARE · HEALTH INFORMATION SERVICES · USA

HealthEquity, Inc. provides technology-enabled service platforms to consumers and employers in the United States. The company is headquartered in Draper, Utah.

R1 RCM Inc

HEALTHCARE · HEALTH INFORMATION SERVICES · USA

R1 RCM Inc (RCM) is a premier provider of technology-driven revenue cycle management services that enhance the financial performance of healthcare organizations nationwide. Utilizing cutting-edge analytics and industry insights, R1 RCM delivers holistic solutions that streamline billing processes and boost operational efficiencies for a wide range of clients, including hospitals and outpatient facilities. The company’s innovative methodologies not only optimize revenue capture but also significantly improve patient experiences, solidifying its position as a pivotal player in the dynamic healthcare landscape. With a strategic focus on expanding its service capabilities and market penetration, R1 RCM is well-positioned to meet the surging demand for sophisticated revenue cycle solutions within the healthcare industry.

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