Heartflow, Inc. (HTFL) stock intrinsic value fair value estimate & owner earnings analysis

Heartflow sells AI-based analysis of heart CT scans (Heartflow FFR CT Analysis, plus Plaque Analysis) that helps cardiologists decide whether a narrowed artery needs treatment. Revenue has grown quickly: $87.2M in 2023, $125.8M in 2024 and $176.0M in 2025, with gross margin of about 77% in 2025 (75% in 2024). Revenue in the first half of 2026 was $116.7M versus $80.6M a year earlier. The business does not yet produce owner earnings. Operating cash flow was negative $76.4M in 2023, $69.0M in 2024 and $54.0M in 2025. After adding back working-capital swings and subtracting stock-based compensation ($14.0M in 2025) and maintenance capital spending (about $2.8M), owner earnings were roughly negative $58M in 2025, or about negative $1.58 per share (earlier years are per-share distorted by the pre-IPO share count). Operating cash flow in the first half of 2026 was negative $38.7M, essentially unchanged from negative $40.5M a year before despite revenue growing about 45%. Our own reconstruction from net loss plus non-cash items does not fully tie out for 2025 because of one-time IPO-related items (debt extinguishment and a convertible note derivative); we relied on the cash-flow statement. All three cases are valued at zero. Our approach credits only earnings that are already evidenced or secured. Revenue growth is real and demonstrated, but the step from growing losses-per-dollar to positive cash generation depends on management's stated expectation that margins improve as volume grows and on operating expenses growing slower than revenue. That has not yet shown up in cash flow, so we do not credit it. In the bear case, cash burn continues at about $55-75M a year and the business never reaches positive owner earnings; the company appears to be worth nothing on the earnings it has actually produced (it has no bank debt after repaying its term loan at the August 2025 IPO). The base and bull cases also carry no value because no named, evidenced driver yet converts revenue growth into owner earnings. The company held about $280M of cash and investments at the end of 2025, which funds several years of current burn, but that cash is not earnings and is not counted as value here. What would make this wrong: if operating cash flow reaches breakeven and turns positive in the next few quarters as revenue keeps rising at 40%+ with gross margins near 77%, the business would be worth a meaningful amount and the estimate would be revisited. Until several quarters of positive owner earnings are visible, we see no price at which the shares offer a margin of safety on demonstrated earnings.