Healthpeak Properties, Inc.DOCNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $43.93 per share(market-calibrated)

+149.2%

Upside to Fair Value

Current

$17.63

Pure Model

$48.13

Fair Value

$43.93

Bull Case

$64.08

Bear Case

$35.77

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $48.13.

What's Driving This Ratingfor DOC

✓

CapEx already efficient

CapEx at 0.95% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 22.30% — below the sector mature average of 30.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.1B (28.39% margin).

→

Moderate revenue growth

Analyst consensus projects -1.11% revenue growth, fading to 2.50% by Year 10. Revenue reaches $3.8B (vs $2.8B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 94.05% indicates efficient cash generation. FCF reaches $2.1B by Year 10 (55.09% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.11

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.48%

Cost of Debt

Pre-tax Cost of Debt2.14%

Tax Rate8.42%

After-tax Cost of Debt1.96%

Equity Weight (E/V)54.03%

Debt Weight (D/V)45.97%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (54.03% × 9.48%) + (45.97% × 1.96%)

= 6.02%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$2.8B	$3.1B	$3.4B	$3.5B	$3.8B
EBIT	$622M	$697M	$846M	$951M	$1.1B
Tax	$52M	$59M	$71M	$80M	$91M
NOPAT	$570M	$639M	$774M	$871M	$992M
+ Depreciation	$843M	$944M	$1.0B	$1.1B	$1.2B
- Capex	$26M	$30M	$32M	$34M	$36M
- Δ NWC	-$2M	$14M	$5M	$5M	$6M
Free Cash Flow	$1.4B	$1.5B	$1.8B	$1.9B	$2.1B
Discount Factor	0.943	0.839	0.746	0.664	0.557
Present Value	$1.3B	$1.3B	$1.3B	$1.3B	$1.2B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.1B

Terminal Growth Rate2.50%

WACC6.02%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$61.2B

PV of Terminal Value$34.1B

Exit Multiple Method

Year 10 EBITDA$2.2B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$49.2B

PV of Terminal Value$27.4B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$12.7B

PV of Terminal Value$34.1B

Enterprise Value$46.7B

(-) Net Debt$9.9B

Equity Value$36.8B

Shares Outstanding696M

Price per Share$52.92

Exit Multiple Method

PV of Projected FCFs$12.7B

PV of Terminal Value$27.4B

Enterprise Value$40.1B

(-) Net Debt$9.9B

Equity Value$30.2B

Shares Outstanding696M

Price per Share$43.34

Pure Model Fair Value

$48.13

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.02%	$70.73	$81.10	$78.06	$74.39	$70.90
5.02%	$53.22	$57.78	$64.15	$73.66	$70.90
6.02%	$42.53	$44.98	$48.13	$52.32	$58.16
7.02%	$35.07	$36.55	$38.35	$40.60	$43.50
8.02%	$29.43	$30.39	$31.52	$32.88	$34.54

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$35.77

102.9% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.38

Base Case

$48.13

173.0% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 1.11

Bull Case

$64.08

263.5% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.94

Key Assumptions & Drivers• Real Estate Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-1.11%

Year 3 Revenue Growth7.95%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin22.30%

Terminal EBIT Margin30.00%

Tax Rate8.42%

Historical Capex / Rev0.95%

NWC / Revenue6.02%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 22x EV/EBITDA (Real Estate sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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