HQY
HealthEquity, Inc.
$103.97
Platform & Compounding FCF
65%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 3.4% above fair value
You pay
$103.97
Bear
$74.76
Fair
$100.59
Bull
$125.40
Bear
$74.76
-28.1%
5% stage 1 growth, 11% discount
Fair
$100.59
-3.3%
9% stage 1 growth, 11% discount
Bull
$125.40
+20.6%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.2%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
20.9x
Market is pricing in (growth)
9.6%
vs 9.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$118.14
Divergence from AlphaVal
15%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $100.59 per share.
Warnings
Stock-based employee pay equals 34% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions