As of June 21, 2025, LHC Group Inc's estimated intrinsic value ranges from $23.45 to $176.99 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $176.99 | +4.2% |
| Discounted Cash Flow (5Y) | $114.14 | -32.8% |
| Dividend Discount Model (Multi-Stage) | $130.40 | -23.2% |
| Dividend Discount Model (Stable) | $32.76 | -80.7% |
| Earnings Power Value | $23.45 | -86.2% |
Is LHC Group Inc (LHCG) undervalued or overvalued?
With the current market price at $169.81, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate LHC Group Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.83 | 1.06 |
| Cost of equity | 7.7% | 10.8% |
| Cost of debt | 4.9% | 8.4% |
| Tax rate | 22.1% | 22.5% |
| Debt/Equity ratio | 0.13 | 0.13 |
| After-tax WACC | 7.3% | 10.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $114 | $4,269M | 80.5% |
| 10-Year Growth | $177 | $6,220M | 65.2% |
| 5-Year EBITDA | $186 | $6,487M | 87.1% |
| 10-Year EBITDA | $229 | $7,824M | 72.4% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $124M |
| Discount Rate (WACC) | 10.3% - 7.3% |
| Enterprise Value | $1,201M - $1,709M |
| Net Debt | $727M |
| Equity Value | $474M - $982M |
| Outstanding Shares | 31M |
| Fair Value | $15 - $32 |
| Selected Fair Value | $23.45 |
| Metric | Value |
|---|---|
| Market Capitalization | $5270M |
| Enterprise Value | $5997M |
| Trailing P/E | 83.59 |
| Forward P/E | 29.23 |
| Trailing EV/EBITDA | 14.70 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.13 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $53.10 |
| Discounted Cash Flow (5Y) | 25% | $28.53 |
| Dividend Discount Model (Multi-Stage) | 20% | $26.08 |
| Dividend Discount Model (Stable) | 15% | $4.91 |
| Earnings Power Value | 10% | $2.34 |
| Weighted Average | 100% | $114.97 |
Based on our comprehensive valuation analysis, LHC Group Inc's weighted average intrinsic value is $114.97, which is approximately 32.3% below the current market price of $169.81.
Key investment considerations:
Given these factors, we believe LHC Group Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.