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AdaptHealth Corp. (AHCO) Intrinsic Value

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

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AdaptHealth Corp. (AHCO)

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Intrinsic Value (DCF)

Current$10.64
→
Intrinsic$46.57
+338%
$26.95$46.57$83.80
Market implies 3% growth for 5 years
DCF analysis suggests AHCO could have 338% upside at 25% growth — verify assumptions match your view.
At $11, the market prices in only 3% growth — below historical 25%, suggesting low expectations.
Range: Bear $27 → Bull $84. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$61$67$73$80
10%$38$42$47$51
12%$25$29$32$35
14%$17$20$22$25

Bull Case

  • Bull case ($84) offers 688% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (3%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($27) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$294.73M
Year 2$368.41M
Year 3$460.52M
Year 4$575.64M
Year 5$719.56M
Terminal$10.59B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$235.78MTTM 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 AHCO stock undervalued or overvalued?
🟢 UNDERVALUED

AHCO trades at $10.64 vs. our DCF-derived intrinsic value of $36.02, implying +257% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of AHCO's future cash flows. The bear case ($18.50) still suggests upside, providing margin of safety.

What is AHCO's intrinsic value?

Using a 5-year DCF model: Base FCF of $236M, projected at 25.0% 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 $2.02B net debt and dividing by 0.14B shares: Bear $18.50 | Base $36.02 | Bull $61.83. Current price $10.64 implies +257% to base case.

How is AHCO's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% 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 ($6.90B).

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.