Toast, Inc. (TOST) DCF Valuation
Why we don't show a single “fair value” for TOST
Even the optimistic scenario of a conservative trailing-FCF model ($11.06) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$24.51 is justified only if free cash flow grows about +49.9% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 12.5% | $7.98 |
| Base case | 18.0%/yr | 11.5% | $9.43 |
| Optimistic | 20.0%/yr | 10.5% | $11.06 |
| Analyst DCF (FMP) | independent reference — different model | $41.84 | |
Current Price
$24.51
Market-Implied Growth
+49.9%/yr
vs +48.0% 5Y actual
Base-Case Model Value
$9.43
model output — not a price target
TOST DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for TOST (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $199.5M · 0.58B shares · net cash $1.3B
Estimated Fair Value
$13.96
-43.0% vs $24.51
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $24.51; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $16.82 | $17.49 | $18.24 | $19.12 | $20.14 |
| 10.5% | $14.80 | $15.28 | $15.82 | $16.43 | $17.13 |
| 11.5% | $13.21 | $13.57 | $13.96 | $14.40 | $14.90 |
| 12.5% | $11.93 | $12.20 | $12.50 | $12.82 | $13.19 |
| 13.5% | $10.88 | $11.09 | $11.31 | $11.56 | $11.84 |
About Toast, Inc.
Toast, Inc. delivers a comprehensive cloud-based digital technology platform tailored specifically for the restaurant sector, serving businesses across the United States and Ireland. Its extensive product suite features an array of hardware solutions, including the foundational Toast Point of Sale (POS) system. Toast Flex offers versatile functionality, adaptable as an on-counter order and payment terminal, a server workstation, a guest kiosk, a kitchen display system, or an order fulfillment hub. For enhanced tableside service and expedited table turnover, the company provides Toast Go, a handheld POS device facilitating ordering and payment acceptance directly at the table, alongside Toast Tap, a compact card reader. Beyond hardware, Toast supplies robust software solutions. Toast Order & Pay empowers guests to place orders and settle bills conveniently from their mobile devices. The platform integrates specialized kitchen display system software, streamlining communication between front-of-house staff and the kitchen team. For larger operations, multi-location management software enables customers to centralize operational control, standardize procedures, and efficiently configure menus. Back-office administrative tasks are supported by xtraCHEF tools. Furthermore, Toast Flex for Kitchen provides a larger, mountable hardware solution designed specifically as a kitchen screen. Regarding customer engagement and logistics, Toast offers the Toast Online Ordering & Toast TakeOut app, a software platform enabling restaurants to accept off-premises orders directly through their branded websites. For delivery, they provide First-Party Delivery services, allowing restaurants to manage their own driver fleets and customize delivery parameters such as hours, zones, fees, and minimum order values. Additionally, Toast Delivery Services connects restaurants with a network of third-party delivery drivers, complemented by broader Toast Delivery Partners services. The company's offerings extend to comprehensive business support services. These encompass loyalty programs and gift card management, payroll and team administration tools, tailored business owner policy insurance with restaurant-specific enhancements, and efficient payment processing solutions. Toast also facilitates financial support through loans advanced to restaurants and purchase financing options. Detailed reporting and analytics solutions provide valuable insights. For broader integration, Toast Partner Connect allows users to discover, select, and seamlessly integrate with various third-party partners via bi-directional APIs. Established in 2011, Toast, Inc. maintains its headquarters in Boston, Massachusetts.
- Sector
- Technology
- Industry
- Software - Infrastructure
- CEO
- Aman Narang