Using an unlevered Free Cash Flow to Firm (FCFF) model, we project HCA Healthcare, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.0% to 8.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 54, DPO 40, DIO 18). At a 7.0% WACC with mid-year discounting, the terminal value (102% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.9x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $173.74 per share, suggesting HCA is overvalued by 64.0% at the current price of $483.13.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | -1,221 | -1,280 | -1,350 | -1,440 | -1,560 | -1,599 |
| (−) Net Interest | 2,258 | 2,367 | 2,497 | 2,662 | 2,885 | 2,957 |
| (+) D&A | 4,507 | 4,865 | 5,110 | 5,348 | 5,638 | 5,779 |
| EBITDA | 5,544 | 5,951 | 6,257 | 6,570 | 6,963 | 7,137 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 5,365 | 5,623 | 5,932 | 6,326 | 6,855 | — |
| (−) ΔWC | 909 | 421 | 505 | 643 | 864 | — |
| Free Cash Flow (FCF) | -731 | -93 | -181 | -399 | -756 | — |
| Peers' EBITDA Multiple | 17.9x | |||||
| Terminal Value | 127,464 | |||||
| WACC / Discount Rate | 6.96% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -706 | -84 | -153 | -315 | -559 | 91,070 |
| Enterprise Value | 89,253 | |||||
| Projection Period | -1,817 | -2.0% | ||||
| Terminal Value | 91,070 | 102.0% | ||||
| (−) Current Net Debt | 49,158 | |||||
| Equity Value | 40,095 | |||||
| (÷) Outstanding Shares | 231M | |||||
| Fair Price | $174 | -64.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.9x | 15.9x | 17.9x | 19.9x | 21.9x |
|---|---|---|---|---|---|
| 5.0% | $115 | $164 | $212 | $261 | $310 |
| 6.0% | $100 | $146 | $193 | $239 | $285 |
| 7.0% | $85 | $130 | $174 | $218 | $262 |
| 8.0% | $72 | $114 | $156 | $198 | $240 |
| 9.0% | $59 | $99 | $139 | $179 | $220 |
Current price: $483.13. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.