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HCA Healthcare, Inc. (HCA) Intrinsic Value

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

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HCA Healthcare, Inc. (HCA)

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Intrinsic Value (DCF)

Current$483.80
→
Intrinsic$439.92
-9%
$240.05$439.92$837.44
Market implies 19% growth for 5 years
HCA appears fairly valued — current price aligns with our DCF estimate.
At $484, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $240 → Bull $837. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →13%15%17%19%
8%$590$655$724$799
10%$351$394$440$489
12%$224$256$290$326
14%$147$171$197$225

Bull Case

  • Bull case ($837) offers 73% upside at 20% growth, 8% discount

Bear Case

  • Bear case ($240) implies 50% downside at 14% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$6.59B
Year 2$7.71B
Year 3$9.01B
Year 4$10.54B
Year 5$12.32B
Terminal$195.22B

📐 Model Inputs

Growth Rate16.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$5.64BTTM 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 HCA stock undervalued or overvalued?
🔴 OVERVALUED

HCA trades at $483.80 vs. our DCF-derived intrinsic value of $395.72, implying -18% downside. Using a 9.5% WACC and 16.9% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($667.01) suggests limited upside.

What is HCA's intrinsic value?

Using a 5-year DCF model: Base FCF of $5.64B, projected at 16.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $43.30B net debt and dividing by 0.26B shares: Bear $210.65 | Base $395.72 | Bull $667.01. Current price $483.80 implies -18% to base case.

How is HCA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.9% 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=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($146.91B).

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: 26.1x.