Toast Inc (TOST) AI Stock Analysis

• Market Cap: $22.36B
• Dividend Yield: N/A
• Average Volume (3M): 7.85M
• Price to Earnings (P/E): 111.9
• Beta (1Y): 1.49
• Revenue Growth: 26.11%
• EPS Growth: N/A
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.25
• Shares Outstanding: 510,000,000
• 10 Day Avg. Volume: 6,331,537
• 30 Day Avg. Volume: 7,850,858
• PEG Ratio: -9.99
• Price to Book (P/B): 13.19
• Price to Sales (P/S): 4.11
• P/FCF Ratio: 66.59
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 4.54
• Enterprise Value/Gross Profit: 18.03
• Enterprise Value/Ebitda: 98.48
• 1Y Price Target: $48.94
• Price Target Upside: 25.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 73 Outperform
• Price Target: $43.00 ▲(10.60% Upside)

Toast Inc's overall stock score is driven by strong financial performance and a positive earnings call outlook. However, high valuation metrics and mixed technical indicators temper the score. The company's strategic growth initiatives and robust cash flow generation are significant strengths, while the high P/E ratio and lack of dividend yield present valuation concerns.

Positive Factors

Revenue Growth

The addition of 8,500 new locations reflects robust demand for Toast's platform, suggesting strong revenue growth potential as the company expands its market reach.

International Expansion

International expansion into markets like Australia enhances Toast's global footprint, providing new revenue streams and diversifying market risk.

Strategic Partnerships

The partnership with American Express enhances Toast's service offerings, potentially increasing customer engagement and retention through integrated solutions.

Negative Factors

Margin Pressure

Expected margin pressure in Q4 could impact profitability, highlighting challenges in maintaining cost efficiency amidst external pressures.

GPV Decline

A decline in Gross Payment Volume per location suggests potential difficulties in sustaining transaction volumes, which could affect revenue growth.

High Valuation Concerns

A high P/E ratio suggests that the stock may be overvalued, which could limit future stock price appreciation and attract scrutiny from value-focused investors.

Toast Inc Business Overview & Revenue Model

Company Description

Toast, Inc. operates a cloud-based and digital technology platform for the restaurant industry in the United States and Ireland. The company offers Toast Point of Sale (POS), a hardware product; Toast Order & Pay, which allows guests to order and pay from their mobile devices; Toast Flex that is used for on-counter order and pay, as well as used as a server station, guest kiosk, kitchen display system, or order fulfillment station; Toast Go, a handheld POS device that enhances the table turn times through tableside ordering and payment acceptance; and Toast Tap, a card reader. It also provides kitchen display system software that connects the front of the house with the kitchen staff; multi-location management software, which allows customers to manage and standardize their operations and configure menus; xtraCHEF that provides back-office tools; and Toast Flex for Kitchen, a larger format mountable piece of hardware that can be used as a kitchen screen. In addition, the company offers Toast Online Ordering & Toast TakeOut app, a software-based platform that provides restaurants to take off-premises orders directly through their branded website; First-Party Delivery services for restaurants to manage a fleet of drivers, and customize delivery hours, zones, fees, and minimum ticket sizes; Toast Delivery Services, which enables restaurants to utilize a partner network of delivery drivers; and Toast Delivery Partners services. Further, it provides loyalty programs and gift cards; payroll and team management products; business owner policy insurance and restaurant-specific add-ons; payment processing solutions; loans advanced to restaurants; purchase financing; reporting and analytics solutions; Toast Partner Connect that allows customers to discover, select, and connect their restaurant to its partners; and bi-directional APIs. The company was incorporated in 2011 and is headquartered in Boston, Massachusetts.

How the Company Makes Money

Toast generates revenue through several key streams. The primary source is subscription and transaction-based fees from its POS system, which restaurants pay to access the software and hardware tools necessary for managing sales and operations. Additional revenue comes from services such as payment processing, where Toast takes a percentage of each transaction processed through its platform. The company also offers a range of add-on services, including marketing solutions and loyalty programs, which provide further monetization opportunities. Significant partnerships with payment processors and hardware vendors enhance its product offerings, allowing Toast to expand its market reach and drive additional revenue growth.

Toast Inc Financial Statement Overview

Summary

Toast Inc's financial statements reflect strong performance with impressive revenue and profit growth, financial stability with low leverage, and robust cash flow generation. The positive trends in profitability and cash flow indicate a well-managed business with a promising outlook.

Income Statement

Toast Inc has shown impressive revenue growth with a TTM (Trailing-Twelve-Months) growth rate of 5.9%, indicating strong market demand. The gross profit margin has improved to 25.2%, reflecting efficient cost management. Net profit margin has significantly increased to 4.1%, showcasing enhanced profitability. The EBIT and EBITDA margins have also improved, indicating better operational efficiency. Overall, the income statement reflects a positive growth trajectory and profitability improvement.

Balance Sheet

The balance sheet of Toast Inc is strong, with a low debt-to-equity ratio of 0.01, indicating minimal leverage and financial stability. The return on equity (ROE) has improved to 13.9%, reflecting effective use of equity to generate profits. The equity ratio stands at 65.7%, showing a solid equity base. Overall, the balance sheet indicates financial stability and efficient capital management.

Cash Flow

Toast Inc has demonstrated robust cash flow performance with a free cash flow growth rate of 24.5% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 0.62 and free cash flow to net income ratio of 0.91 reflect efficient cash conversion. Overall, the cash flow statement highlights strong cash generation and effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.53B	4.96B	3.87B	2.73B	1.71B	823.00M
Gross Profit	1.39B	1.19B	834.00M	511.00M	314.00M	140.00M
EBITDA	255.00M	108.00M	-255.00M	-360.00M	-207.00M	-209.00M
Net Income	224.00M	19.00M	-246.00M	-275.00M	-487.00M	-248.00M
Balance Sheet
Total Assets	2.77B	2.41B	1.96B	1.76B	1.74B	776.00M
Cash, Cash Equivalents and Short-Term Investments	1.70B	1.42B	1.12B	1.02B	1.27B	581.82M
Total Debt	19.00M	24.00M	44.00M	94.00M	99.00M	172.00M
Total Liabilities	949.00M	863.00M	764.00M	663.00M	644.00M	1.25B
Stockholders Equity	1.82B	1.54B	1.19B	1.10B	1.09B	-471.00M
Cash Flow
Free Cash Flow	508.00M	306.00M	93.00M	-189.00M	-17.00M	-161.00M
Operating Cash Flow	558.00M	360.00M	135.00M	-156.00M	2.00M	-125.00M
Investing Cash Flow	-22.00M	-39.00M	-86.00M	-98.00M	-503.00M	-36.00M
Financing Cash Flow	22.00M	18.00M	63.00M	38.00M	759.00M	594.00M

Toast Inc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 38.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOST, the sentiment is Neutral. The current price of 38.88 is above the 20-day moving average (MA) of 37.18, below the 50-day MA of 39.57, and below the 200-day MA of 39.91, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 54.15 is Neutral, neither overbought nor oversold. The STOCH value of 78.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TOST.

Toast Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYO	―	$2.19B	23.51	13.86%	―	13.02%	-2.57%
FOUR	―	$6.74B	28.26	19.00%	―	23.86%	79.35%
TOST	―	$22.36B	111.87	14.51%	―	26.11%	―
FFIV	―	$17.14B	25.61	20.58%	―	8.94%	22.30%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NTNX	―	$18.96B	108.15	―	―	18.11%	―
MQ	―	$2.12B	―	-6.51%	―	17.47%	-544.72%

Toast Inc Corporate Events

Toast, Inc. Earnings Call: Strong Growth and Strategic Moves

Toast, Inc. Earnings Call Highlights Strong Growth and Strategic Initiatives

Toast, Inc. Reports Strong Q2 2025 Growth and New Partnerships

Toast, Inc., a leading cloud-based digital technology platform, specializes in providing comprehensive software and financial technology solutions for the restaurant industry, helping streamline operations and enhance guest experiences. In its second quarter of 2025, Toast reported significant growth, adding a record 8,500 new locations and achieving a 31% increase in annualized recurring run-rate to $1.9 billion. The company also announced a strategic partnership with American Express to enhance dining experiences and expand its market reach.