Author presents a DCF valuation of Nutex Health (NUTX) arguing the stock is undervalued with a $403 fair value and 158% upside, while flagging regulatory risk to its out-of-network arbitrage revenue.
NUTX — LONG The author's DCF model, using base-case revenue growth from 80% in year 1 tapering to 4% by year 10 and EBIT margins rising to 27.5%, yields a fair value of $403 per share, implying 158% upside with a 61.3% margin of safety. The core business driver is arbitrage revenue from out-of-network billing, which the author says has won 85% of cases against insurers like UNH and represents 75% of revenue. The main stated risk is regulatory: a possible restriction of IRP arbitrage opportunities, which the author claims the stock is already heavily discounting. The author notes worst-case models assuming a 30% revenue drop from CMS arbitrage limits still return fair values above the current price.
my DCF model gives me a fair value per share of $403, a potential upside of 158% with a margin of safety of 61.3%