Is HCA Healthcare, Inc. (HCA) overvalued?
On Equity Rank's model estimate, HCA trades 15% above its fair value. HCA Healthcare, Inc. (HCA) last closed at $494.99; the multi-method model fair value is $429.26.
| Price | Model fair value | Price vs model |
|---|---|---|
| $494.99 | $429.26 | 15% above |
What the answer rests on
- 0 of 8 valuation methods put HCA's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, HCA's free cash flow would need to grow about 2.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 23.1% a year.
- HCA trades at 15.3 times its last year's earnings, against a median of 22.6 for 21 profitable Medical Facilities companies.
- Over the past year the price sat below the model fair value on 7% of trading days. The gap ranged from 33% below to 25% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind HCA's fair value · What prices assume · Other companies