...

The Toro Company (TTC) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

The Toro Company (TTC)

View Full Profile →

Intrinsic Value (DCF)

Current$89.57
→
Intrinsic$94.55
+6%
$61.98$94.55$156.44
Market implies 13% growth for 5 years
TTC appears fairly valued — current price aligns with our DCF estimate.
At $90, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (14%).
Range: Bear $62 → Bull $156. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →10%12%14%16%
8%$115$126$138$150
10%$79$87$95$103
12%$59$65$71$77
14%$47$51$56$61

Bull Case

  • Bull case ($156) offers 75% upside at 17% growth, 9% discount
  • 5% margin of safety vs. base case estimate
  • Market-implied growth (13%) ≤ historical CAGR (14%)

Bear Case

  • Bear case ($62) implies 31% downside at 11% growth, 12% discount
Loading charts...

5-Year Free Cash Flow Projection

Year 1$530.71M
Year 2$603.89M
Year 3$687.16M
Year 4$781.91M
Year 5$889.73M
Terminal$13.09B

📐 Model Inputs

Growth Rate13.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$466.40MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare TTC vs AAPLStock Screener

Frequently Asked Questions

Is TTC stock undervalued or overvalued?
🟡 FAIRLY VALUED

TTC trades at $89.57, within 10% of our $94.55 intrinsic value estimate. At 10.0% WACC and 13.8% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $62.66 (bear) to $139.41 (bull).

What is TTC's intrinsic value?

Using a 5-year DCF model: Base FCF of $466M, projected at 13.8% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $842M net debt and dividing by 0.10B shares: Bear $62.66 | Base $94.55 | Bull $139.41. Current price $89.57 implies +13% to base case.

How is TTC's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 13.8% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($10.71B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 23.0x.