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Welltower Inc. (WELL) Intrinsic Value

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

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Welltower Inc. (WELL)

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Intrinsic Value (DCF)

Current$188.18
→
Intrinsic$90.84
-52%
$53.70$90.84$164.73
Market implies 31% growth for 5 years
Current price reflects execution expectations above 15% growth — not unreasonable for quality businesses.
At $188, the market prices in continued strong cash flow growth (31%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $54 → Bull $165. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →11%13%15%17%
8%$118$130$143$157
10%$74$82$91$100
12%$51$57$63$70
14%$36$41$46$51

Bull Case

  • Bull case ($165) with 18% growth, 8% discount rate

Bear Case

  • Bear case ($54) implies 71% downside at 12% growth, 12% discount
  • Price reflects 31% growth expectations vs 15% historical — high bar to clear
  • Trading 52% above base case — execution must exceed assumptions to justify
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5-Year FFO Projection

Year 1$3.03B
Year 2$3.48B
Year 3$4.00B
Year 4$4.60B
Year 5$5.29B
Terminal$83.87B

📐 Model Inputs

Growth Rate15.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$2.63BTTM 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. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is WELL stock undervalued or overvalued?
🔴 OVERVALUED

WELL trades at $188.18 vs. our DCF-derived intrinsic value of $90.84, implying -51% downside. Using a 9.5% WACC and 15.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($145.28) suggests limited upside.

What is WELL's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.63B, projected at 15.0% 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 $13.25B net debt and dividing by 0.61B shares: Bear $53.70 | Base $90.84 | Bull $145.28. Current price $188.18 implies -51% to base case.

How is WELL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.0% 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=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($68.55B).

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.