TOST
Toast, Inc.
$23.16
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 30.3% below fair value
You pay
$23.16
Bear
$20.12
Fair
$33.23
Bull
$49.51
Bear
$20.12
-13.1%
12% stage 1 growth, 12% discount
Fair
$33.23
+43.5%
20% stage 1 growth, 12% discount
Bull
$49.51
+113.8%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
26.9x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $36.56 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $33.23 per share.
Warnings
Stock-based employee pay equals 71% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions