Critical Analysis: PACS Group (NYSE:PACS) versus HealthEquity (NASDAQ:HQY)

HealthEquity (NASDAQ:HQY) and PACS Group (NYSE:PACS) are both mid-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

99.6% of HealthEquity shares are held by institutional investors. 1.5% of HealthEquity shares are held by company insiders. Comparatively, 70.4% of PACS Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares HealthEquity and PACS Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthEquity	$1.20 billion	5.60	$96.70 million	$2.18	36.09
PACS Group	$5.29 billion	1.04	$191.54 million	$1.23	28.54

PACS Group has higher revenue and earnings than HealthEquity. PACS Group is trading at a lower price-to-earnings ratio than HealthEquity, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

HealthEquity has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, PACS Group has a beta of -0.63, suggesting that its stock price is 163% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for HealthEquity and PACS Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthEquity	1	2	11	1	2.80
PACS Group	0	1	4	1	3.00

HealthEquity presently has a consensus target price of $112.00, indicating a potential upside of 42.37%. PACS Group has a consensus target price of $44.40, indicating a potential upside of 26.46%. Given HealthEquity’s higher probable upside, research analysts plainly believe HealthEquity is more favorable than PACS Group.

Profitability

This table compares HealthEquity and PACS Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthEquity	14.86%	12.94%	8.06%
PACS Group	3.62%	22.55%	3.45%

Summary

HealthEquity beats PACS Group on 9 of the 14 factors compared between the two stocks.

About HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.

About PACS Group

PACS Group, Inc., through its subsidiaries, operates skilled nursing facilities and assisted living facilities in the United States. The company also provides senior care and independent facilities. It engages in the acquisition, ownership, and leasing of health care-related properties. The company was founded in 2013 and is based in Farmington, Utah.