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

With their stocks sporting a Zacks Rank #2 (Buy), value merchandise retailer Ollie’s Bargain Outlet OLLI and healthcare account management provider HealthEquity HQY are worthy of consideration after comfortably exceeding Q1 expectations on Tuesday.

What stands out most about Ollie’s and HealthEquity is their market strategies in an uncertain economic environment. This underlies their strong financial results and makes OLLI and HQY two top-rated stocks to keep an eye on.

OLLI & HQY Q1 Results         

Ollie’s Q1 sales came in at $576.77 million, rising 13% from $508.82 million a year ago and topping estimates of $564.69 million by 2%. On the bottom line, Ollie’s posted Q1 earnings of $0.75 per share, beating EPS expectations of $0.70 by 7% and increasing 3% from the prior period.

Pivoting to HealthEquity, Q1 sales of $330.84 million were up 15% from $287.6 million in the comparative quarter and topped estimates of $321.13 million by 3%. More intriguing, Q1 EPS of $0.97 spiked 21% from $0.80 per share a year ago and crushed expectations of $0.81 by nearly 20%.  

Ollie’s Highlights Its Expansion

Offering brand-name merchandise at reduced prices via closeout merchandise and excess inventory from manufacturers or wholesalers, Ollie’s popularity has taken off in recent years and opened 25 new stores during the first quarter, a record for any period during its history.

Launching its IPO in 2015, Ollie’s now has over 500 stores in 32 states. Sticking to its frugal yet high-achieving operating strategy, Ollies acquired many of its new locations through a bankruptcy auction of former Big Lots stores. Pinpointing its operating niche, Ollie’s highlighted that there have been a number of retail store closures and supply chain disruptions that have created a tremendous amount of excess inventory, with the company believing there could be significant product and market share opportunities.

Furthermore, Ollie’s stated its new stores are off to a very strong start, appearing to benefit from the fact that they are in built-in locations that already have a discount shopper customer base. Notably, Ollie’s stock is virtually flat for the year but has soared over +400% since going public.

HealthEquity’s Enrollment & Contribution Strategy

Driving HealthEquity’s strong Q1 results was its enrollment and contribution strategy, which it has grown from its existing customer base, especially during what it called uncertain times. HealthEquity highlighted that times of uncertainty usually bring the strongest selling seasons. To that point, HealthEquity is helping employers reduce health care costs while empowering employees to build health security, as health care costs are growing faster than wages.

Correlating with such, HealthEquity’s Health Savings Accounts (HSA) assets spiked 15% year over year to a record $31.27 billion. This added fuel to an intra-day rally that saw HealthEquity’s stock reach new 52-week highs of $116 a share today, with HQY up more than +15% year to date.

Conclusion & Final Thoughts

Ollie’s Bargain Outlet and HealthEquity have implemented successful growth strategies that investors are surely looking for as tariff concerns and economic uncertainty loom. This makes OLLI and HQY two stocks to watch after strong Q1 results, with it noteworthy that Ollie’s and HealthEquity are expected to post double-digit EPS growth in their current fiscal year 2026 and FY27.  

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This article originally published on Zacks Investment Research (zacks.com).

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