HealthEquity (HQY) shares plummeted 17.39% in pre-market trading on Wednesday following the release of disappointing fourth-quarter earnings and weak fiscal year 2026 guidance. The health savings account (HSA) administrator's performance fell short of analysts' expectations, triggering a significant sell-off among investors.

The company reported adjusted earnings per share of $0.69 for the fourth quarter, missing the analyst consensus estimate of $0.72. While this represents a 9.52% increase from the same period last year, it wasn't enough to satisfy investor expectations. Revenue for the quarter came in at $311.817 million, surpassing the $306.053 million estimate, but the bottom-line miss overshadowed this achievement.

Adding to investor concerns, HealthEquity's outlook for fiscal year 2026 disappointed Wall Street. The company expects adjusted earnings per share between $3.57 and $3.74, with the midpoint falling below the $3.71 analysts had projected. Similarly, the revenue guidance of $1.28 billion to $1.31 billion also came in slightly below market expectations. On the earnings call, the company revealed that gross profit and margins in the quarter were impacted by approximately $17 million of additional service costs related to cybersecurity and fraud prevention, further contributing to the negative sentiment.

Despite reporting growth in key metrics such as HSA accounts and total HSA assets, with a record one million new HSAs added in fiscal year 2025 bringing the total to nearly 10 million, the weaker-than-anticipated earnings and guidance have spooked investors. The stock is on track for its biggest one-day percentage decline in two years if the pre-market losses hold, reflecting the market's disappointment with the company's near-term prospects.