Assessing Hinge Health’s True Value After Recent Sector Volatility and Fresh Partnerships in 2025

• Wondering if Hinge Health is a hidden gem or a value trap? You are in the right place for a deep dive into what the numbers tell us about the stock's true worth.
• While shares are up 18.0% year-to-date, the last month’s -11.0% and last week’s -17.1% pullbacks show the market’s perception can shift quickly. These changes raise key questions about risk and reward.
• Recent news has spotlighted shifting sentiment around digital health stocks and fresh partnerships in the sector. Both factors have contributed to the volatility seen in Hinge Health's price. Analyst and investor attention continues to grow as digital musculoskeletal care gains traction nationwide.
• Our initial valuation score for Hinge Health lands at 3 out of 6, hinting at room for improvement and opportunities worth exploring. Before we dig into traditional valuation approaches, stick around for a new way to look at value that could make all the difference in your investing strategy.

Hinge Health delivered 0.0% returns over the last year. See how this stacks up to the rest of the Healthcare industry.

Approach 1: Hinge Health Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a business’s true worth by projecting its future cash flows and discounting them back to today’s value. This approach is widely used to gauge whether a stock is trading for more or less than it is fundamentally worth.

For Hinge Health, the latest free cash flow stands at $145.9 million. Analysts provide estimates through 2029, projecting free cash flow to rise to $356 million over the next five years. In addition, further cash flow growth is extrapolated for up to ten years by Simply Wall St, resulting in continued, though moderating, increases each year.

These projections use a two-stage Free Cash Flow to Equity model, and all figures are based on company reporting in US dollars. The calculated intrinsic fair value per share is $122.72, which is substantially higher than Hinge Health’s current market price. According to this DCF estimate, the stock is trading at a 63.9% discount. This suggests that it is significantly undervalued at today’s levels relative to projected cash flow growth.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hinge Health is undervalued by 63.9%. Track this in your watchlist or portfolio, or discover 872 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Hinge Health.

Approach 2: Hinge Health Price vs Sales

For companies like Hinge Health that are not yet profitable, the Price-to-Sales (P/S) ratio is often the preferred valuation metric. This is because sales figures are less volatile than earnings and provide a more stable benchmark, especially for high-growth businesses in early stages or rapidly changing industries.

The "right" P/S ratio for any stock is shaped by expectations about future growth, business risks and the profit margins the company might eventually earn. Higher growth and lower risk can justify a higher P/S multiple, while slower growth or greater uncertainty typically mean a lower fair value.

Currently, Hinge Health trades at a P/S ratio of 6.53x. Industry peers average 4.15x, while the broader healthcare sector sits at 1.35x. While Hinge Health's multiple is clearly higher than both, this difference alone does not tell us whether the stock is overvalued, since it might reflect stronger growth prospects or a premium business model.

This is where Simply Wall St’s “Fair Ratio” comes in. Unlike a simple comparison to industry or peer averages, the Fair Ratio accounts for Hinge Health’s future sales growth, profit potential, business risks, industry segment, and market capitalization. This proprietary benchmark is designed to give a more tailored, comprehensive assessment of value than a one-size-fits-all industry average.

In this case, Hinge Health’s P/S ratio is reasonably close to its Fair Ratio. This means the market is assigning a price that makes sense when all relevant factors are considered.

Result: ABOUT RIGHT

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hinge Health Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a story investors build around a company by connecting their perspective on where the business is heading with the numbers behind fair value estimates and forecasts for revenue, earnings, and profit margins. It is a smarter approach that links a company’s progress to a dynamic financial forecast and a fair value, showing how new developments should change your investing decisions.

Narratives are simple to use and fully accessible on the Simply Wall St Community page, which is trusted by millions of investors. By comparing a company’s Fair Value to its current price, Narratives make it easier to decide if now is the right time to buy or sell. As fresh news or financial updates emerge, Narratives are updated instantly, helping you stay on top of changing opportunities and risks.

For example, some investors may see Hinge Health’s potential and set a much higher fair value, while others remain cautious and use a lower estimate. With Narratives, you can see these perspectives side by side and make more informed choices using both story and data.

Do you think there's more to the story for Hinge Health? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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