Is it safe to buy Healthequity stock after plunging 24% after earnings?

On Tuesday, Healthequity Inc. (NASDAQ:HQY) shares declined by 24% after announcing its most recent quarterly results. The company reported its FQ3 revenue and earnings Monday after markets closed, missing the consensus for analyst expectations. Healthequity also issued a full-year 2022 revenue guidance below the consensus Street forecast.

The company posted FQ3 non-GAAP earnings per share of $0.35, in line with expectations. However, its GAAP EPS of -$0.06 missed the average analyst estimate of $0.00, while revenue for the quarter edged slightly higher by 0.3% from the same quarter last year to $179.95 million, missing expectations by $5.49 million.

Healthequity now expects to post full-year 2022 revenue in the range of $750 million to $755 million, below the consensus Street forecast of $762.09 million.

Is Healthequity stock still overvalued?

From an investment perspective, Healthequity shares trade at a reasonable forward P/E ratio of 25.05, making it an interesting option for value investors.

However, analysts expect its earnings per share to plummet by nearly 80% this year, before bouncing back by 17.86% next year.

Therefore, long-term growth investors may opt for alternatives in the market. The stock has now plummeted more than 34% this year, making it an exciting technical buy for short-term investors.

Technically, Healthequity shares seem to have plunged to complete a downward channel breakout in the intraday chart. As a result, the stock has fallen deep into oversold conditions, creating the perfect opportunity for a technical rebound.

Therefore, investors could target short-term rebound profits at around $48.57, or higher at $54.22, while $36.90 and $31.43 are crucial support zones.