HESM — Valuation Models

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

Valuation Summary

Model	Intrinsic Value	vs Price ($39.49)
DCF	$41.95	+6.2%
Graham Number	$16.81	-57.4%
Reverse DCF	—	implied g: 8.6%
DDM	$61.18	+54.9%
EV/EBITDA	$38.48	-2.5%

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

1 — Discounted Cash Flow (DCF)

Assumptions

Base FCF($B)Yahoo: $409.76M

Near-term growth (yrs 1–5)(%)Rev: 2.1% / EPS: 9.2%

Long-term growth (yrs 6–10)(%)

Terminal growth rate(%)

WACC(%)Computed: 5.11%

Computed WACC: 5.11%

Cost of equity (Re)7.43%(Rf 4.30% + β 0.57 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

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

Equity weight (E/V)68.74%

Debt weight (D/V)31.26%

Results

Intrinsic Value / share$154.44

Current Price$39.49

Upside / Downside+291.1%

Net Debt (used)$3.77B

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

WACC \ Near-term	1.2%	5.2%	9.2%	13.2%	17.2%
7.0%	$44.24	$58.67	$75.38	$94.63	$116.71
8.0%	$30.68	$42.24	$55.60	$70.98	$88.60
9.0%	$21.31	$30.89	$41.95	$54.66	$69.20
10.0%	$14.45	$22.58	$31.96	$42.72	$55.03
11.0%	$9.22	$16.25	$24.35	$33.64	$44.24

2 — Graham Number

Assumptions

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

EPS (trailing)($)Yahoo: $2.86

Book Value / share($)Yahoo: $4.39

Results

Graham Number$16.81

Current Price$39.49

Margin of Safety-57.4%

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

3 — Reverse DCF (Implied Growth)

Assumptions

WACC(%)Computed: 5.11%

Terminal growth rate(%)

Computed WACC: 5.11%

Cost of equity (Re)7.43%(Rf 4.30% + β 0.57 × ERP 5.50%)

Cost of debt (Rd)0.00%(no debt / unavailable → 0%)

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

Equity weight (E/V)68.74%

Debt weight (D/V)31.26%

Results

Current Price$39.49

Implied Near-term FCF Growth-5.5%

Historical Revenue Growth2.1%

Historical Earnings Growth9.2%

Base FCF (TTM)$409.76M

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: $2.97

Dividend growth rate (g)(%)

Required return (r)(%)

Results

DDM Intrinsic Value / share$61.18

Current Price$39.49

Upside / Downside+54.9%

Formula: D0 × (1+g) / (r − g)

5 — EV/EBITDA Multiple

Assumptions

EBITDA($B)Yahoo: $1.22B

Target EV/EBITDA multipleCurrent: 7.2×

Net Debt($B)Default: $3.77B

Results

Implied Equity Value / share$38.48

Current Price$39.49

Upside / Downside-2.5%

Implied EV$8.75B

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

Mult \ Net Debt	$1.77B	$2.77B	$3.77B	$4.77B	$5.77B
3.2x	$16.16	$8.43	$0.70	$-7.03	$-14.75
5.2x	$35.05	$27.32	$19.59	$11.86	$4.14
7.2x	$53.94	$46.21	$38.48	$30.76	$23.03
9.2x	$72.83	$65.10	$57.38	$49.65	$41.92
11.2x	$91.72	$84.00	$76.27	$68.54	$60.81

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