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Addus HomeCare Corporation (ADUS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Addus HomeCare Corporation (ADUS)

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Intrinsic Value (DCF)

Current$109.80
→
Intrinsic$175.91
+60%
$116.67$175.91$288.37
Market implies 9% growth for 5 years
DCF analysis suggests ADUS could have 60% upside at 20% growth — verify assumptions match your view.
At $110, the market prices in 9% annual cash flow growth — a moderate expectation aligned with historical trends (20%).
Range: Bear $117 → Bull $288. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →16%18%20%22%
8%$217$235$256$277
10%$149$162$176$191
12%$112$122$132$143
14%$88$96$104$113

Bull Case

  • Bull case ($288) offers 163% upside at 24% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (9%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($117) with 16% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$132.46M
Year 2$158.95M
Year 3$190.74M
Year 4$228.89M
Year 5$274.67M
Terminal$4.04B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$110.38MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ADUS stock undervalued or overvalued?
🟢 UNDERVALUED

ADUS trades at $109.80 vs. our DCF-derived intrinsic value of $175.91, implying +59% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of ADUS's future cash flows. The bear case ($111.93) still suggests upside, providing margin of safety.

What is ADUS's intrinsic value?

Using a 5-year DCF model: Base FCF of $110M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $174M net debt and dividing by 0.02B shares: Bear $111.93 | Base $175.91 | Bull $270.12. Current price $109.80 implies +59% to base case.

How is ADUS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($3.23B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.