As of September 23, 2025, NextGen Healthcare Inc's estimated intrinsic value ranges from $2.04 to $21.79 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $21.79 | -9.0% |
| Discounted Cash Flow (5Y) | $16.44 | -31.3% |
| Dividend Discount Model (Multi-Stage) | $17.81 | -25.6% |
| Earnings Power Value | $2.04 | -91.5% |
Is NextGen Healthcare Inc (NXGN) undervalued or overvalued?
With the current market price at $23.94, 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 NextGen Healthcare 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 | 0.48 | 0.66 |
| Cost of equity | 6.1% | 8.6% |
| Cost of debt | 12.4% | 12.4% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.17 | 0.17 |
| After-tax WACC | 6.5% | 8.6% |
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 | $16 | $1,317M | 87.9% |
| 10-Year Growth | $22 | $1,676M | 76.0% |
| 5-Year EBITDA | $15 | $1,222M | 87.0% |
| 10-Year EBITDA | $19 | $1,457M | 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 | $26M |
| Discount Rate (WACC) | 8.6% - 6.5% |
| Enterprise Value | $302M - $399M |
| Net Debt | $214M |
| Equity Value | $88M - $185M |
| Outstanding Shares | 67M |
| Fair Value | $1 - $3 |
| Selected Fair Value | $2.04 |
| Metric | Value |
|---|---|
| Market Capitalization | $1606M |
| Enterprise Value | $1820M |
| Trailing P/E | 0.00 |
| Forward P/E | 97.18 |
| Trailing EV/EBITDA | 12.65 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 3.39% |
| Debt-to-Equity Ratio | 0.17 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $6.54 |
| Discounted Cash Flow (5Y) | 29% | $4.11 |
| Dividend Discount Model (Multi-Stage) | 24% | $3.56 |
| Earnings Power Value | 12% | $0.20 |
| Weighted Average | 100% | $16.95 |
Based on our comprehensive valuation analysis, NextGen Healthcare Inc's intrinsic value is $16.95, which is approximately 29.2% below the current market price of $23.94.
Key investment considerations:
Given these factors, we believe NextGen Healthcare Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.