2 Buy-Rated Stocks to Watch After Strong Q1 Results: OLLI, HQY

Ollie's Bargain Outlet (OLLI) and HealthEquity (HQY) are being highlighted as buy-rated stocks following strong Q1 results, driven by successful market strategies amidst economic uncertainty. Ollie's Q1 sales rose 13% to $576.77 million, with EPS at $0.75, while HealthEquity's Q1 sales increased 15% to $330.84 million, with EPS spiking 21% to $0.97; both companies exceeded estimates and are expected to post double-digit EPS growth in their current fiscal years.

Analysis

Ollie’s Bargain Outlet (OLLI) and HealthEquity (HQY) demonstrated robust first-quarter performances, significantly exceeding market expectations and reinforcing their Zacks Rank #2 (Buy) ratings. OLLI reported Q1 sales of $576.77 million, a 13% year-over-year increase that surpassed estimates by 2%, while its Q1 earnings per share (EPS) of $0.75 beat expectations by 7%. This performance is attributed to its value-driven retail model and aggressive expansion, including a record 25 new store openings in Q1, many acquired from former Big Lots locations, capitalizing on retail closures and excess inventory. HealthEquity also delivered strong Q1 results, with sales climbing 15% year-over-year to $330.84 million, exceeding estimates by 3%, and a notable 21% year-over-year spike in Q1 EPS to $0.97, crushing expectations by nearly 20%. HealthEquity's success stems from its enrollment and contribution strategy, particularly effective in uncertain economic times, leading to a 15% year-over-year increase in Health Savings Accounts (HSA) assets to a record $31.27 billion and its stock reaching new 52-week highs. Both companies are navigating the current economic environment, characterized by tariff concerns and uncertainty, with effective market strategies, and are projected to achieve double-digit EPS growth in their respective fiscal years 2026 and 2027.

Key Decisions for Investors

• Given their strong Q1 earnings, successful strategic execution in an uncertain economic environment, and Zacks Rank #2 (Buy) rating, investors should consider Ollie's Bargain Outlet and HealthEquity for potential inclusion in portfolios focused on companies with demonstrated resilience and growth.
• For Ollie's, monitor the progress of its record store expansion, particularly the integration of newly acquired locations and its ability to consistently source and sell closeout merchandise, considering its stock is currently flat year-to-date despite substantial long-term appreciation since its IPO.
• For HealthEquity, its strong growth in HSA assets to a record $31.27 billion and its stock achieving new 52-week highs underscore its favorable positioning; continued success in its enrollment and contribution strategy will be crucial, especially as both companies are anticipated to deliver double-digit EPS growth in fiscal years 2026 and 2027.