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Waystar Holding Corp. (WAY) Intrinsic Value

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

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Waystar Holding Corp. (WAY)

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Intrinsic Value (DCF)

Current$30.27
→
Intrinsic$26.38
-13%
$15.66$26.38$46.72
Market implies 28% growth for 5 years
WAY appears fairly valued — current price aligns with our DCF estimate.
At $30, the market prices in continued strong cash flow growth (28%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $16 → Bull $47. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$34$37$41$45
10%$22$24$26$29
12%$15$17$18$20
14%$10$12$13$15

Bull Case

  • Bull case ($47) offers 54% upside at 30% growth, 9% discount

Bear Case

  • Bear case ($16) implies 48% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$178.13M
Year 2$222.66M
Year 3$278.32M
Year 4$347.90M
Year 5$434.88M
Terminal$6.40B

📐 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$142.50MTTM 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 WAY stock undervalued or overvalued?
🔴 OVERVALUED

WAY trades at $30.27 vs. our DCF-derived intrinsic value of $20.62, implying -37% downside. Using a 10.0% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($34.72) suggests limited upside.

What is WAY's intrinsic value?

Using a 5-year DCF model: Base FCF of $143M, 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 $1.08B net debt and dividing by 0.15B shares: Bear $11.04 | Base $20.62 | Bull $34.72. Current price $30.27 implies -37% to base case.

How is WAY'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 ($4.17B).

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.