This research paper explores the application, effectiveness, and limitations of the Discounted Cash Flow (DCF) approach in valuing healthcare companies. The DCF approach estimates the present value of a company’s future cash flows while considering the time value of money. It aligns well with the unique dynamics and challenges of the healthcare sector. The DCF approach captures sector-specific characteristics, such as lengthy development cycles and regulatory risks. However, accurately forecasting future cash flows is challenging due to the rapidly changing healthcare landscape. The reliance on assumptions and inputs in the DCF model can significantly impact valuation outcomes. Insights from various studies support these findings, emphasizing the importance of reliable industry data and the impact of regulatory changes on DCF valuations. Overall, the DCF approach is valuable in valuing healthcare companies but has limitations in forecasting and reliance on assumptions.