Research HubSoftware & Cloud ServicesWaystar Holding Corp. (WAY)

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SEC 10-K / 10-Q Equity ResearchSoftware & Cloud ServicesTicker: WAY

Waystar Holding Corp. (WAY) DCF Valuation & Fundamental Primer

Waystar Holding Corp. (WAY) currently trades at $31.78 with an enterprise value of $9.91B. Our proprietary institutional model rates Waystar Holding Corp. at 82/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 9.5% vs. historical growth of 26.7% (Substantial Margin of Safety).

GDA Quality Score

A82/100

High-Quality Compounder

Share Price / DCF Base

$31.78 / $59.58

Enterprise Value

$5.10B

TTM Revenue

$809.4M (+26.7%)

Gross Margin

83.5%

Rule of 40 Score

61.2%

EV / TTM Revenue

6.3×

Structural Moat: Enterprise Software & Cloud Services Switching Costs & Recurring Workflow Integration

Key Growth Catalyst: AI workflow automation, multi-module expansion across enterprise cohorts, and operating margin leverage at Waystar Holding Corp..

Institutional fundamental teardown of Waystar Holding Corp. (WAY) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.

Seed WAY in Interactive 3-Statement Model

Section 1 · Intrinsic Valuation Engine

Waystar Holding Corp. (WAY) 3-Scenario DCF Valuation Range

WACC: 10.0% · Terminal Growth: 2.5% · Diluted Shares: 173.2M

bear Case DCFSensitivity

$24.29

Implied Equity Value:$4.21B

vs Current ($31.78):-23.6%

base Case DCFPrimary Benchmark

$59.58

Implied Equity Value:$10.32B

vs Current ($31.78):+87.5%

bull Case DCFSensitivity

$112.68

Implied Equity Value:$19.51B

vs Current ($31.78):+254.6%

Interactive What-If DCF SandboxSim Rule of 40: 61.2%

Stress-test WAY's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.

Seed Custom Drivers in /model

1-Click Regimes:

5Y Revenue CAGR26.7%

2%Hist: 26.7%50%

Target FCF Margin34.5%

5%Base: 34.5%45%

WACC Discount Rate10.0%

6.5%Base: 10%14.5%

Terminal Growth (g)2.5%

1.0%Implies 13.7× Y5 FCF4.0%

Accounting Lens:

Simulated Implied Price$59.58

Spread vs Market+87.5%

Simulated EV$9.91B

Effective FCF Margin34.5%

Simulated 5-Year Cash Flow Trajectory (Unlevered FCF vs. Discounted PV)Cumulative 5Y PV: $2.18B

Year 1$1.03B

FCF:$353.8M

PV:$321.6M

Year 2$1.30B

FCF:$448.3M

PV:$370.5M

Year 3$1.65B

FCF:$568.0M

PV:$426.7M

Year 4$2.09B

FCF:$719.6M

PV:$491.5M

Year 5$2.64B

FCF:$911.7M

PV:$566.1M

Enterprise Value Composition Bridge$9.91B

Split between 5-Year Explicit Cash Flows and Discounted Terminal Value

5Y Explicit PV: $2.18B (22.0%)Terminal PV: $7.74B (78.0%)

(+) Balance Sheet Cash & Equivalents+$688.0M

(−) Total Debt Obligations−$283.3M

(=) Implied Equity Value (173.2M shs)$10.32B

2D Institutional Valuation Sensitivity Heatmap

Implied share price & upside/downside spread across 25 valuation states (Current Price: $31.78).

WACC \ Terminal	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	$66.25 +108%	$70.42 +122%	$75.29 +137%	$81.05 +155%	$87.96 +177%
9.3%	$59.49 +87%	$62.78 +98%	$66.55 +109%	$70.93 +123%	$76.07 +139%
10.0%	$53.94 +70%	$56.58 +78%	$59.58 +87%	$63.00 +98%	$66.95 +111%
10.8%	$49.30 +55%	$51.46 +62%	$53.88 +70%	$56.62 +78%	$59.73 +88%
11.5%	$45.37 +43%	$47.16 +48%	$49.15 +55%	$51.38 +62%	$53.88 +70%

Section 2 · Fundamental Underwriting

Institutional Software Quality Scorecard (82/100 · Grade A)

High-Quality Compounder

Strong fundamentals, above-average cash generation, and robust competitive positioning.

Cash Conversion25 / 25

Actual: 186% of EBITTarget: Target: ≥100%

Elite deferred revenue float; FCF exceeds operating income by >20%

Dilution Friction10 / 25

Actual: 15.2% of RevTarget: Target: ≤8%

Elevated equity dilution; SBC consumes substantial operating cash flow

Unit Economics25 / 25

Actual: 83% GM / R40: 61%Target: Target: ≥75% GM / ≥40% R40

Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40

Balance Sheet22 / 25

Actual: +$404.7M Net CashTarget: Target: Net Cash > 0

Positive net cash cushion; self-funding operations with zero insolvency risk

Core Investment Strengths & Moats

High-grade cash conversion: FCF is 186% of EBIT driven by upfront annual collections
Top-quartile software unit economics: 83.5% gross margin and 61.2% Rule of 40 score
Net cash positive: $404.7M balance sheet buffer

Key Operational & Dilution Risks

Substantial SBC dilution drag: SBC is 15.2% of revenue ($123.0M)

Section 3 · Expectations Investing

Reverse-DCF Solver: What Growth is Priced Into WAY?

Substantial Margin of Safety

The current share price only requires 9.5% 5-year CAGR (18.2% dilution-adjusted), well below historical growth of 26.7%. If the company maintains baseline execution, there is asymmetric upside.

Implied 5-Year Revenue CAGR

9.5%

Required to justify $5.10B EV

Historical Run-Rate CAGR

26.7%

Audited multi-year top-line trajectory

Growth Hurdle Spread

-17.2%

Implied hurdle minus historical growth

Implied FCF Margin @ Hist. Growth

17.7%

Steady-state FCF margin needed at current CAGR

Institutional Dilution-Adjusted Hurdle Lens

Headline Reverse-DCF ignores Stock-Based Compensation (15.2% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 18.2% 5-year revenue CAGR to justify $31.78/sh on a true per-share economic cash flow basis.

True Economic Hurdle18.2%

SBC & Dilution Hurdle Tax+8.7% / yr

Section 4 · 5-Year Forecast Schedule

Waystar Holding Corp. (WAY) 5-Year Fundamental Forecast

Customize in Live Engine

Statement Line Item	TTM Audited Base	TTM	Y1	Y2	Y3	Y4	Y5
Revenue	$809.4M	$809.4M	$1.03B	$1.30B	$1.65B	$2.09B	$2.64B
Gross Profit	$675.9M	$675.9M	$856.3M	$1.08B	$1.37B	$1.74B	$2.21B
Operating Income (EBIT)	$149.7M	$149.7M	$189.7M	$240.4M	$304.6M	$385.9M	$488.9M
Stock-Based Compensation (SBC)	$123.0M	$123.0M	$155.9M	$197.5M	$250.2M	$317.0M	$401.7M
Unlevered Free Cash Flow (FCF)	$279.2M	$279.2M	$353.8M	$448.3M	$568.0M	$719.6M	$911.7M
SBC-Adjusted True Cash Flow	$156.2M	$156.2M	$197.9M	$250.8M	$317.7M	$402.6M	$510.0M

Section 5 · Relative Valuation Multiples & Regression

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Click any peer node or ticker to open its dedicated equity research report

Rule of 40 vs. EV / Revenue Multiple Regression

OLS Fit: EV/Rev = -12.4 + 0.44 × (Rule of 40) · R² = 28%

Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.

WAY Actual vs. Reg. Multiple6.3× vs 14.7× fair

Reg.-Implied Share Price$71.26 (57.3% Discount)

WAYWaystar Holding Corp.·Rule of 40: 61.2%·Actual EV/Rev: 6.3×·Regression Fair Multiple: 14.7×

57.3% Below Trendline (Attractive)Open WAY Report

Company	Ticker	Market Cap	TTM Revenue	Gross Margin	FCF Margin	Rule of 40	SBC % Rev	EV / Rev
Waystar Holding Corp.	WAY	$5.50B	$809.4M	83.5%	34.5%	61.2%	15.2%	6.3×
ServiceNow	NOW	$152.61B	$10.98B	79.2%	31.1%	54.2%	15.9%	13.9×
Workday, Inc.	WDAY	$50.35B	$8.00B	75.0%	27.4%	43.9%	19.0%	6.4×
Salesforce	CRM	$217.10B	$37.90B	77.2%	32.8%	42.8%	8.4%	5.8×
Datadog	DDOG	$46.05B	$2.68B	80.8%	31.1%	57.7%	21.3%	17.4×
Snowflake Inc.	SNOW	$71.79B	$3.63B	66.5%	25.2%	57.7%	40.8%	20.0×
Hubspot	HUBS	$19.89B	$2.63B	85.0%	21.3%	52.7%	19.2%	7.7×
Peer Cohort Median Benchmark (N=6)				78.2%	29.2%	53.5%	19.1%	10.8×

Section 6 · Downside Protection & Multiple Sensitivity

EV / Revenue Multiple Compression Stress Test

Multiple Scenario	EV / Revenue	Implied Enterprise Value	Implied Equity Value	Implied Share Price	Delta vs Current
Current Multiple	6.3×	$5.10B	$5.50B	$31.78	0.0%
-20% Multiple Compression	5.0×	$4.08B	$4.48B	$25.89	-20.0%
-35% Multiple Compression	4.1×	$3.31B	$3.72B	$21.47	-35.0%
Software Baseline Floor (5.0× EV/Rev)	5.0×	$4.05B	$4.45B	$25.70	-20.6%

Section 7 · Investor Diligence FAQ

Frequently Asked Questions: Waystar Holding Corp. (WAY) Valuation

What is Waystar Holding Corp. (WAY)'s intrinsic DCF valuation and implied share price?

Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Waystar Holding Corp. (WAY) has a Base Case implied value of $59.58 per share (with a Bear Case of $24.29 and a Bull Case of $112.68), compared to its current price of $31.78. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.

What is Waystar Holding Corp. (WAY)'s Rule of 40 score and Free Cash Flow margin?

Waystar Holding Corp. achieves a Rule of 40 score of 61.2%, combining a 26.7% revenue growth run-rate with a 34.5% TTM free cash flow margin on $809.4M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.

What revenue growth rate is priced into WAY stock according to Reverse-DCF analysis?

At $31.78 per share (Enterprise Value of $5.10B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 9.5%, compared to Waystar Holding Corp.'s historical CAGR of 26.7%. Overall market expectations are rated as "Substantial Margin of Safety".

How does Waystar Holding Corp. compare to Software & Cloud Services software peers?

Waystar Holding Corp. (WAY) earns an institutional Software Quality Score of 82/100 (Grade A — High-Quality Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.

How does Stock-Based Compensation (SBC) impact Waystar Holding Corp. (WAY)'s valuation?

Waystar Holding Corp. recorded $123.0M in TTM stock-based compensation (15.2% of revenue). When treating SBC as a cash-equivalent compensation expense, Waystar Holding Corp.'s SBC-adjusted free cash flow yield is 2.8%, scoring 10/25 on our Shareholder Dilution Friction pillar.

Waystar Holding Corp. (WAY) DCF Valuation & Fundamental Primer

WACC \ Terminal

1.5%

2.0%

2.5%

3.0%

3.5%

8.5%

$66.25

+108%

$70.42

+122%

$75.29

+137%

$81.05

+155%

$87.96

+177%

9.3%

$59.49

+87%

$62.78

+98%

$66.55

+109%

$70.93

+123%

$76.07

+139%

10.0%

$53.94

+70%

$56.58

+78%

$59.58

+87%

$63.00

+98%

$66.95

+111%

10.8%

$49.30

+55%

$51.46

+62%

$53.88

+70%

$56.62

+78%

$59.73

+88%

11.5%

$45.37

+43%

$47.16

+48%

$49.15

+55%

$51.38

+62%

$53.88

+70%

Statement Line Item

TTM Audited Base

TTM

Revenue

$809.4M

$1.03B

$1.30B

$1.65B

$2.09B

$2.64B

Gross Profit

$675.9M

$856.3M

$1.08B

$1.37B

$1.74B

$2.21B

Operating Income (EBIT)

$149.7M

$189.7M

$240.4M

$304.6M

$385.9M

$488.9M

Stock-Based Compensation (SBC)

$123.0M

$155.9M

$197.5M

$250.2M

$317.0M

$401.7M

Unlevered Free Cash Flow (FCF)

$279.2M

$353.8M

$448.3M

$568.0M

$719.6M

$911.7M

SBC-Adjusted True Cash Flow

$156.2M

$197.9M

$250.8M

$317.7M

$402.6M

$510.0M

Company

Ticker

Market Cap

TTM Revenue

Gross Margin

FCF Margin

Rule of 40

SBC % Rev

EV / Rev

Waystar Holding Corp.

WAY

$5.50B

$809.4M

83.5%

34.5%

61.2%

15.2%

6.3×

ServiceNow

NOW

$152.61B

$10.98B

79.2%

31.1%

54.2%

15.9%

13.9×

Workday, Inc.

WDAY

$50.35B

$8.00B

75.0%

27.4%

43.9%

19.0%

6.4×

Salesforce

CRM

$217.10B

$37.90B

77.2%

32.8%

42.8%

8.4%

5.8×

Datadog

DDOG

$46.05B

$2.68B

80.8%

31.1%

57.7%

21.3%

17.4×

Snowflake Inc.

SNOW

$71.79B

$3.63B

66.5%

25.2%

57.7%

40.8%

20.0×

Hubspot

HUBS

$19.89B

$2.63B

85.0%

21.3%

52.7%

19.2%

7.7×

Peer Cohort Median Benchmark (N=6)

78.2%

29.2%

53.5%

19.1%

10.8×

Multiple Scenario

EV / Revenue

Implied Enterprise Value

Implied Equity Value

Implied Share Price

Delta vs Current

Current Multiple

6.3×

$5.10B

$5.50B

$31.78

0.0%

-20% Multiple Compression

5.0×

$4.08B

$4.48B

$25.89

-20.0%

-35% Multiple Compression

4.1×

$3.31B

$3.72B

$21.47

-35.0%

Software Baseline Floor (5.0× EV/Rev)

5.0×

$4.05B

$4.45B

$25.70

-20.6%

Waystar Holding Corp. (WAY) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (82/100 · Grade A)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into WAY?

Waystar Holding Corp. (WAY) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Waystar Holding Corp. (WAY) Valuation

What is Waystar Holding Corp. (WAY)'s intrinsic DCF valuation and implied share price?

What is Waystar Holding Corp. (WAY)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into WAY stock according to Reverse-DCF analysis?

How does Waystar Holding Corp. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Waystar Holding Corp. (WAY)'s valuation?

Related Software & Cloud Services Equity Research Reports

Waystar Holding Corp. (WAY) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (82/100 · Grade A)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into WAY?

Waystar Holding Corp. (WAY) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Waystar Holding Corp. (WAY) Valuation

What is Waystar Holding Corp. (WAY)'s intrinsic DCF valuation and implied share price?

What is Waystar Holding Corp. (WAY)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into WAY stock according to Reverse-DCF analysis?

How does Waystar Holding Corp. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Waystar Holding Corp. (WAY)'s valuation?

Related Software & Cloud Services Equity Research Reports