Tootsie Roll Industries (TR) — FAQ

Question 1

What is a reverse DCF analysis?

Accepted Answer

Reverse DCF solves for the annual growth rate implied by the current price, instead of assuming a growth rate to compute fair value. This page runs the model on trailing EPS and on free cash flow per share — both views appear below so you can compare what the market implies under each.

Question 2

What EPS growth is priced into TR?

Accepted Answer

On the EPS basis, the model implies about 4.4% annual EPS growth for Tootsie Roll Industries (TR) at the current price. Compare to the 5-year historical EPS CAGR of 11.6%.

Question 3

What FCF / share growth is priced into TR?

Accepted Answer

On the FCF / share basis, the model implies about 50.8% annual free-cash-flow-per-share growth for Tootsie Roll Industries (TR) at the current price. Compare to the 3-year historical FCF-per-share CAGR of 16.0%.

Question 4

Should I use EPS basis or FCF / share basis?

Accepted Answer

EPS basis is the textbook reverse-DCF input — broadly comparable across companies and easy to relate to next-year analyst consensus — but it is distorted by non-cash items like stock-based compensation and large depreciation. FCF / share is closer to the cash actually available to shareholders after capex; it tends to give a cleaner picture for mature cash-generative businesses, but it is more volatile during heavy-capex years and analyst consensus is not available for it. Most premium DCF tools recommend cross-checking both.

Question 5

What is TR's fair value based on historical growth?

Accepted Answer

If Tootsie Roll Industries (TR) grew at its historical per-share CAGR in the DCF setup, the model produces the following fair values. Using the historical EPS CAGR, fair value lands at about $71.08 — 80.3% above the current price. Using the historical FCF-per-share CAGR, fair value lands at about $3.23 — 91.8% below the current price.

Question 6

Is TR overvalued or undervalued?

Accepted Answer

Compare the implied per-share growth on each basis to the corresponding historical CAGR and, for EPS, to analyst consensus. A reverse DCF is one educational lens — it does not account for changes in capital structure, sector cycles, or business-model transitions, and it is not investment advice.

Method	Fair value	Upside vs price
Forward DCF	$71.08	+80.31%
Exit multiple	$38.07	-3.42%
Analyst target	—	—
Graham number	$8.18	-79.24%

Row axis: discount rate. Column axis: terminal growth.Terminal g →↓ Discount	1.5%	2.0%	2.5%	3.0%	3.5%
5.0%	46.4%	44.3%	41.8%	38.8%	34.9%
5.6%	49.5%	47.7%	45.6%	43.2%	40.4%
6.6%	53.9%	52.4%	50.8%	49.0%	46.9%
7.6%	57.8%	56.5%	55.2%	53.7%	52.1%
8.6%	61.3%	60.3%	59.1%	57.9%	56.5%

Fair Value for Tootsie Roll Industries (TR)

Fair value (multi-method)

Valuation methods

Model inputs

Sensitivity — implied growth vs your assumptions

Historical multiples

Frequently asked questions

Tootsie Roll Industries (TR) Key Financials

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