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DCF Valuation
Base-case fair value
$146.70
Intrinsic $195.60 · 25% MOS
Current price: $97.89
Base-case summary
Our base-case DCF for Encompass Health Corp (EHC) projects 10 years of free cash flow growth at 19.4% for years 1–5 and 9.7% for years 6–10, anchored to 19.4% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $464M in trailing free cash flow, this produces an intrinsic value of $195.60 per share. A 25% safety margin gives a fair value of $146.70, suggesting the stock is currently 50% undervalued against the $97.89 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$464M
Cash & equivalents
$111M
Total debt
$3.1B
Shares outstanding
101M