Nutex Health Inc. (NUTX) stock intrinsic value fair value estimate & owner earnings analysis

Nutex Health operates roughly two dozen small emergency-focused hospitals and micro-hospitals, most of them in Texas, and a smaller population-health business. Physician partners own part of most hospitals, so a large share of the profit belongs to them rather than to Nutex shareholders (about $110 million of $180 million of 2025 net income, and about $74 million of cash distributions to those partners). What changed the company: since 2024 revenue per visit has jumped because Nutex wins higher payment rates for out-of-network claims through the arbitration process created by the federal No Surprises Act, supported by a third-party vendor (HaloMD) engaged in May 2024. Revenue went from $248 million in 2023 to $480 million in 2024 and $875 million in 2025, while patient visits grew only about 12% in 2025 (mature hospitals about 1.3%). In 2024, a change in accounting estimate for arbitration receivables added about $169.7 million of revenue that partly related to earlier periods. How we measured earnings: we started from cash generated by operations, removed the swing in receivables and other working capital, and deducted stock compensation and maintenance capital spending (very small: about $2.5 million a year). On that basis, earnings per diluted share were about -$6.74 (2022), -$1.98 (2023), $20.18 (2024) and $32.39 (2025). Only 2024 and 2025 reflect the current business, so we used those two years. Because those figures include the partners' share, we then deducted the partners' income (about $43 million in 2024, $110 million in 2025), which gives roughly $12 and $16 per share, and we anchor on about $13. Stock compensation of $117 million in 2025 was mostly one-time earn-out shares for new hospitals; we deducted it in full because the shares are real dilution (the share count is only about 7 million). Cross-check: first-half 2026 operating cash flow of $109.7 million (versus $78.2 million a year earlier) annualizes to about the same level, which supports the anchor. 2024 to 2025 growth in these figures was about 60% but is not carried forward: revenue in the second quarter of 2026 was about 14% below the prior year and the first half was down about 6%. Base case: about $13 per share a year for ten years, then a gradual fade to zero over the following ten years, worth about $120 per share. We credit no growth. New hospital openings, share gains and further rate increases are not secured. The payment-rate regime has been in place since 2022 and has produced results for two years, which is why some earning power is credited; the fade reflects that nothing named protects it beyond that. Bear case: arbitration outcomes and vendor practices come under pressure, and the disputes claim the company itself discloses (a securities class action filed August 2025 over the vendor's conduct and accounting for share obligations, plus two derivative suits) go badly. Earnings fall to roughly $8, $4 and then zero per share over three years, worth about $10. The 2023 result before the arbitration windfall was a loss, which is why the bear case can fall this low. Receivables of $260 million were built up in 2024 and 2025; if they are collected at lower rates than assumed, cash earnings would be well below the reported level. Bull case: revenue per visit holds, the one-time earn-out stock compensation does not recur (ongoing stock compensation was $16.6 million in 2024), and the earnings level rises to about $24 per share, held ten years and then faded over ten more, worth about $220 per share. What could make this wrong: cash earnings, not reported earnings, are the test. If we did not remove the working-capital swing, 2025 earnings after the partners' share would be only about $3 per share. Accrual revenue depends on estimates of arbitration outcomes, and management refined those estimates in 2024. Also, the financial statements use the latest restated figures and the 2024 annual report was amended twice. We do not add the company's cash or subtract its debt; earnings already reflect cash interest, and the values above are values per share of the business as it operates today. The values above are values of the business, independent of any market price. Because of the regulatory dependence, litigation and small size, the margin-of-safety price is set with a wide margin, roughly 55% below base value, at around $50 per share.