TOST
Toast, Inc.
$29.79
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.8% below fair value
You pay
$29.79
Bear
$19.99
Fair
$33.01
Bull
$49.19
Bear
$19.99
-32.9%
12% stage 1 growth, 12% discount
Fair
$33.01
+10.8%
20% stage 1 growth, 12% discount
Bull
$49.19
+65.1%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
35.9x
Market is pricing in (growth)
18.8%
vs 19.8% base
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 $35.84 from 30 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $33.01 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