HQY
HealthEquity, Inc.
$92.66
Platform & Compounding FCF
65%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 6.9% below fair value
You pay
$92.66
Bear
$73.96
Fair
$99.52
Bull
$124.07
Bear
$73.96
-20.2%
5% stage 1 growth, 11% discount
Fair
$99.52
+7.4%
9% stage 1 growth, 11% discount
Bull
$124.07
+33.9%
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
19.0x
Market is pricing in (growth)
8.3%
vs 9.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$115.33
Divergence from AlphaVal
14%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $99.52 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