Is HealthEquity, Inc. overvalued or undervalued?

As of 2 September 2025, the valuation grade for HealthEquity, Inc. has moved from expensive to very expensive, indicating a significant deterioration in its valuation appeal. The company appears overvalued based on its current metrics, with a P/E ratio of 53, a Price to Book Value of 4.54, and an EV to EBITDA of 24.08.
In comparison to its peers, HealthEquity's P/E ratio is notably higher than Franklin Resources, Inc. at 14.94 and Stifel Financial Corp. at 18.08, both of which are considered more attractively valued. Additionally, the PEG ratio of 0.50 suggests that HealthEquity may not be justified in its high valuation relative to its growth prospects. While HealthEquity has outperformed the S&P 500 over the past year with a return of 23.28% compared to 17.14%, its long-term performance has lagged significantly, particularly over three and five years, where it returned 33.95% and 91.49%, respectively, versus the S&P 500's 70.41% and 96.61%.