HCI — Valuation Models

Interactive models with editable assumptions. All calculations run client-side.

Valuation Summary

Model	Intrinsic Value	vs Price ($173.76)
DCF	$5850.92	+3267.2%
Graham Number	$123.73	-28.8%
Reverse DCF	—	implied g: -18.8%
DDM	$32.96	-81.0%
EV/EBITDA	$90.74	-47.8%

Values reflect default assumptions. Adjust inputs in each model below to update.

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $403.05M

Near-term growth (yrs 1–5)(%)Rev: 48.0% / EPS: —

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 10.60%

Computed WACC: 10.60%

Cost of equity (Re)10.94%(Rf 4.30% + β 1.21 × ERP 5.50%)

Cost of debt (Rd)1.25%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)96.54%

Debt weight (D/V)3.46%

Results

Intrinsic Value / share$4386.61

Current Price$173.76

Upside / Downside+2424.5%

Net Debt (used)-$488.47M

Sensitivity: WACC (rows) × Near-term g (cols)

WACC \ Near-term	40.0%	44.0%	48.0%	52.0%	56.0%
7.0%	$7037.79	$8079.34	$9242.15	$10536.57	$11973.49
8.0%	$5510.47	$6321.36	$7226.45	$8233.75	$9351.71
9.0%	$4468.04	$5121.62	$5850.92	$6662.41	$7562.85
10.0%	$3715.49	$4255.57	$4858.09	$5528.32	$6271.87
11.0%	$3149.65	$3604.47	$4111.73	$4675.87	$5301.58

2 — Graham Number

Assumptions

MultiplierGraham used 22.5 (15× P/E × 1.5× P/B)

EPS (trailing)($)Yahoo: $15.78

Book Value / share($)Yahoo: $43.12

Results

Graham Number$123.73

Current Price$173.76

Margin of Safety-28.8%

Formula: √(22.5 × max(0,EPS) × max(0,BVPS))

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 10.60%

Terminal growth rate(%)

Computed WACC: 10.60%

Cost of equity (Re)10.94%(Rf 4.30% + β 1.21 × ERP 5.50%)

Cost of debt (Rd)1.25%(interest expense ÷ avg debt (SEC))

Tax rate (T)21.00%(US statutory fallback)

Equity weight (E/V)96.54%

Debt weight (D/V)3.46%

Results

Current Price$173.76

Implied Near-term FCF Growth-16.0%

Historical Revenue Growth48.0%

Historical Earnings Growth—

Base FCF (TTM)$403.05M

Implied growth is the FCF growth rate (yrs 1–5) that makes the DCF intrinsic value equal the current price. Long-term growth is set to half the implied near-term rate.

4 — Dividend Discount Model (DDM)

Assumptions

Annual dividend D0($/share)Yahoo: $1.60

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$32.96

Current Price$173.76

Upside / Downside-81.0%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $447.34M

Target EV/EBITDA multipleCurrent: 1.5×

Net Debt($B)Default: -$488.47M

Results

Implied Equity Value / share$90.74

Current Price$173.76

Upside / Downside-47.8%

Implied EV$687.56M

Sensitivity: EV/EBITDA multiple (rows) × Net Debt (cols)

Mult \ Net Debt	-$2.49B	-$1.49B	-$488.47M	$511.53M	$1.51B
-2.5x	$107.00	$29.84	$-47.32	$-124.48	$-201.64
-0.5x	$176.03	$98.87	$21.71	$-55.45	$-132.61
1.5x	$245.06	$167.90	$90.74	$13.58	$-63.58
3.5x	$314.10	$236.94	$159.78	$82.62	$5.46
5.5x	$383.13	$305.97	$228.81	$151.65	$74.49

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