HQY
HealthEquity, Inc.
$88.11
Platform & Compounding FCF
65%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 8.3% below fair value
You pay
$88.11
Bear
$70.28
Fair
$96.09
Bull
$121.13
Bear
$70.28
-20.2%
6% stage 1 growth, 11% discount
Fair
$96.09
+9.1%
10% stage 1 growth, 11% discount
Bull
$121.13
+37.5%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
20.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $109.89 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $96.09 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