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Toro Co. – Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing
The Toro Company is a leading worldwide provider of innovative solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions. With sales of $3.4 billion in fiscal 2020, The Toro Company's global presence extends to more than 125 countries through a family of brands that includes Toro, Ditch Witch, Exmark, BOSS Snowplow, Ventrac, American Augers, Subsite Electronics, HammerHead, Trencor, Unique Lighting Systems, Irritrol, Hayter, Pope, Perrot, Lawn-Boy and Radius HDD. Through constant innovation and caring relationships built on trust and integrity, The Toro Company and its family of brands have built a legacy of excellence by helping customers work on golf courses, sports fields, construction sites, public green spaces, commercial and residential properties and agricultural operations.
Analysis Results
Intrinsic Value $569.43
Latest Price $75.63
Relative Value 87% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 35.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 35.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.19 1.11
2023 1.61 1.4
2024 2.18 1.77
2025 2.96 2.23
2026 4.0 2.81
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 76.7 billion. This corresponds to a present value of 50.2 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 9.32 billion. Adding in the terminal value gives a total present value of 59.5 billion.

There are presently 105.0 million outstanding shares, so the intrinsic value per share is 569.43.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 2,978,370,000
Current Cash 811,224,000
Current Liabilities 1,874,038,000
Current Debt 0
Non-Cash Working Capital (NCWC) 293,108,000
Change in NCWC 101,276,000
EBIT 1,036,560,000
Tax Provision 179,876,000
Depreciation and Amortization 198,632,000
Capital Expenditure -208,024,000
Unlevered Free Cash Flow 941,923,840
Current Assets 1,427,648,000
Current Cash 479,892,000
Current Liabilities 855,797,000
Current Debt 99,873,000
Non-Cash Working Capital (NCWC) 191,832,000
Change in NCWC -102,175,000
EBIT 426,357,000
Tax Provision 77,369,000
Depreciation and Amortization 95,615,000
Capital Expenditure -78,068,000
Unlevered Free Cash Flow 260,694,252
Current Assets 1,122,891,000
Current Cash 151,828,000
Current Liabilities 756,970,000
Current Debt 79,914,000
Non-Cash Working Capital (NCWC) 294,007,000
Change in NCWC 221,129,000
EBIT 325,029,000
Tax Provision 48,150,000
Depreciation and Amortization 87,698,000
Capital Expenditure -92,881,000
Unlevered Free Cash Flow 492,392,127
Current Assets 894,637,000
Current Cash 289,124,000
Current Liabilities 532,635,000
Current Debt 0
Non-Cash Working Capital (NCWC) 72,878,000
Change in NCWC 18,786,000
EBIT 373,085,000
Tax Provision 100,458,000
Depreciation and Amortization 61,277,000
Capital Expenditure -90,124,000
Unlevered Free Cash Flow 262,380,404
Current Assets 859,886,000
Current Cash 310,256,000
Current Liabilities 521,796,000
Current Debt 26,258,000
Non-Cash Working Capital (NCWC) 54,092,000
Change in NCWC -10,007,000
EBIT 355,110,000
Tax Provision 85,467,000
Depreciation and Amortization 64,986,000
Capital Expenditure -58,276,000
Unlevered Free Cash Flow 265,879,927
Current Assets 779,009,000
Current Cash 273,555,000
Current Liabilities 463,839,000
Current Debt 22,484,000
Non-Cash Working Capital (NCWC) 64,099,000
Change in NCWC -99,927,000
EBIT 334,396,000
Tax Provision 99,466,000
Depreciation and Amortization 64,097,000
Capital Expenditure -50,723,000
Unlevered Free Cash Flow 147,192,293
Current Assets 710,679,000
Current Cash 126,275,000
Current Liabilities 443,734,000
Current Debt 23,356,000
Non-Cash Working Capital (NCWC) 164,026,000
Change in NCWC 27,825,000
EBIT 299,114,000
Tax Provision 89,440,000
Depreciation and Amortization 63,143,000
Capital Expenditure -56,374,000
Unlevered Free Cash Flow 241,783,922
Current Assets 824,036,000
Current Cash 314,873,000
Current Liabilities 400,420,000
Current Debt 27,458,000
Non-Cash Working Capital (NCWC) 136,201,000
Change in NCWC 54,772,000
EBIT 270,419,000
Tax Provision 82,575,000
Depreciation and Amortization 53,138,000
Capital Expenditure -71,138,000
Unlevered Free Cash Flow 220,116,387
Current Assets 653,267,000
Current Cash 182,993,000
Current Liabilities 388,845,000
Current Debt 0
Non-Cash Working Capital (NCWC) 81,429,000
Change in NCWC -28,585,000
EBIT 237,759,000
Tax Provision 71,868,000
Depreciation and Amortization 54,134,000
Capital Expenditure -49,427,000
Unlevered Free Cash Flow 138,511,419
Current Assets 612,134,000
Current Cash 125,856,000
Current Liabilities 378,122,000
Current Debt 1,858,000
Non-Cash Working Capital (NCWC) 110,014,000
Change in NCWC 15,079,000
EBIT 211,609,000
Tax Provision 66,721,000
Depreciation and Amortization 53,634,000
Capital Expenditure -43,242,000
Unlevered Free Cash Flow 165,141,651

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