Toast Inc (TOST) AI Stock Analysis

• Market Cap: $15.09B
• Dividend Yield: N/A
• Average Volume (3M): 12.52M
• Price to Earnings (P/E): 49.1
• Beta (1Y): 1.45
• Revenue Growth: 25.76%
• EPS Growth: N/A
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.25
• Shares Outstanding: 524,000,000
• 10 Day Avg. Volume: 14,585,035
• 30 Day Avg. Volume: 12,519,935
• PEG Ratio: 0.04
• Price to Book (P/B): 9.73
• Price to Sales (P/S): 3.36
• P/FCF Ratio: 33.99
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 2.35
• Enterprise Value/Gross Profit: 9.11
• Enterprise Value/Ebitda: 37.22
• 1Y Price Target: $39.05
• Price Target Upside: 40.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): 1.22
• Revenue Forecast (FY): $7.40B

• Rating: 72 Outperform
• Price Target: $29.00 ▲(4.50% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by improving fundamentals—stronger profitability, robust free cash flow, and a low-leverage balance sheet—reinforced by confident 2026 growth/EBITDA guidance. These positives are tempered by weak technicals (price well below key moving averages with negative MACD) and a relatively expensive valuation (high P/E with no dividend).

Positive Factors

Balance Sheet Strength

Extremely low leverage and growing equity give the company durable financial flexibility. Low debt reduces solvency and refinancing risk, supports opportunistic buybacks and investment, and provides a buffer to fund strategic initiatives or absorb cyclical shocks over the next 2–6 months.

Improved Cash Generation

Sustained improvement in operating cash flow and FCF (growing each year to $608M) reflects higher earnings quality and operational efficiency. Strong cash generation funds R&D, buybacks, and working capital without reliance on new debt, increasing resilience and enabling strategic deployment over the medium term.

Recurring Revenue & Market Position

Robust ARR growth, record net location adds and rising U.S. SMB share signal durable platform adoption. High recurring revenue and location scale support predictable cash flows, cross-sell of fintech and SaaS, and tiered pricing leverage, underpinning sustainable gross-profit expansion over coming quarters.

Negative Factors

Revenue Growth Deceleration

A fall from hyper-growth to mid-single-digit top-line growth materially changes the growth profile and investor calculus. Slower revenue requires sustained ARPU expansion, higher retention, or faster new TAM monetization to maintain margin expansion and justify reinvestment levels over the next 2–6 months.

Hardware Cost Headwinds

Rising component and tariff costs directly pressure gross margins where hardware contributes meaningfully. A multi-quarter weighted inventory roll-in could offset recent margin gains, forcing either lower profitability or pricing changes that may slow adoption and compress durable margin improvement.

Early-stage TAM Economics

Expansion into enterprise, international and retail is boosting ARR but remains early-stage with longer paybacks and lower ARPU. Until these TAMs scale to sub-20 month paybacks, they will weigh on consolidated unit economics and require continued investment, limiting near-term margin upside.

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 Inc generates revenue primarily through its subscription-based model, where restaurants pay for access to its POS software and additional services on a monthly basis. Key revenue streams include software subscriptions, hardware sales (such as POS terminals and peripherals), payment processing fees, and additional offerings like Toast Payroll and Toast Marketing. The company also benefits from strategic partnerships with various payment processors and service providers, enhancing its service offerings and driving further revenue. Additionally, Toast earns transaction-based fees from payments processed through its platform, which adds a significant layer to its earnings.

Toast Inc Financial Statement Overview

Summary

Strong balance sheet with minimal leverage and rising equity, plus a clear profitability and cash-flow inflection in 2024–2025 (materially higher operating profit and $608M free cash flow in 2025). The key offset is sharply decelerating revenue growth (down to ~5% in 2025) and still-thin net margins for software, making sustained margin discipline important.

Income Statement

Revenue growth has decelerated sharply (2021: 107% → 2022: 60% → 2023: 41% → 2024: 28% → 2025: 5%), but profitability has improved materially. The company moved from meaningful losses in 2021–2023 to positive earnings in 2024 and a much stronger 2025, with operating profit and net income expanding and margins stepping up (2025 net margin ~5.6% vs. ~0.4% in 2024). Gross margin has also trended higher versus earlier years, supporting the turnaround. Key weakness: the business is now profitable, but current growth is modest and margins remain relatively thin for a software business, leaving results more sensitive to cost pressure or demand softness.

Balance Sheet

Balance sheet strength looks solid with very low leverage: debt-to-equity is ~0.02 in 2024–2025 and total debt is small ($40M in 2025) relative to equity ($2.1B). Equity has grown consistently since 2021, improving financial flexibility and reducing solvency risk. Returns on equity improved dramatically, turning from negative in 2021–2023 to positive in 2024 and strong in 2025 (~16%), consistent with the profitability inflection. Main watch-out: while leverage is low, the business only recently became consistently profitable, so sustained returns depend on maintaining margin gains.

Cash Flow

Cash generation has strengthened significantly: operating cash flow improved from negative in 2022 to $135M (2023), $360M (2024), and $661M (2025), with free cash flow rising to $608M in 2025. Free cash flow also grew year-over-year in each of the last three annual periods, indicating improving underlying efficiency. A key positive is that 2025 free cash flow is close to net income (about 0.92x), suggesting earnings quality has improved versus earlier years. Weakness: cash flow was volatile earlier in the period (notably negative in 2022), so the durability of the current cash profile should be monitored through a full cycle.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.15B	4.96B	3.87B	2.73B	1.71B
Gross Profit	1.58B	1.19B	834.00M	511.00M	314.00M
EBITDA	372.00M	108.00M	-255.00M	-360.00M	-207.00M
Net Income	342.00M	19.00M	-246.00M	-275.00M	-487.00M
Balance Sheet
Total Assets	3.15B	2.46B	1.96B	1.76B	1.74B
Cash, Cash Equivalents and Short-Term Investments	1.99B	1.42B	1.12B	1.02B	1.27B
Total Debt	40.00M	34.00M	44.00M	94.00M	99.00M
Total Liabilities	1.02B	918.00M	764.00M	663.00M	644.00M
Stockholders Equity	2.12B	1.54B	1.19B	1.10B	1.09B
Cash Flow
Free Cash Flow	608.00M	306.00M	93.00M	-189.00M	-17.00M
Operating Cash Flow	661.00M	360.00M	135.00M	-156.00M	2.00M
Investing Cash Flow	-172.00M	-39.00M	-86.00M	-98.00M	-503.00M
Financing Cash Flow	7.00M	18.00M	63.00M	38.00M	759.00M

Toast Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.75
• 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 Negative. The current price of 27.75 is below the 20-day moving average (MA) of 28.20, below the 50-day MA of 32.40, and below the 200-day MA of 38.72, indicating a bearish trend. The MACD of -1.80 indicates Negative momentum. The RSI at 39.38 is Neutral, neither overbought nor oversold. The STOCH value of 27.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TOST.

Toast Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFIV	79 Outperform	$15.37B	23.06	20.84%	―	9.66%	23.87%
TOST	72 Outperform	$15.09B	49.12	18.64%	―	25.76%	―
PAYO	71 Outperform	$1.79B	27.62	9.79%	―	10.58%	-45.52%
FOUR	68 Neutral	$5.17B	26.93	15.52%	―	23.16%	27.38%
MQ	62 Neutral	$1.83B	-132.65	-1.51%	―	20.11%	-391.61%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NTNX	58 Neutral	$10.24B	51.33	―	―	17.45%	―

Toast Inc Corporate Events

Toast boosts buybacks after strong 2025 results

Toast on Feb. 12, 2026 reported strong fourth-quarter and full-year 2025 results, highlighted by a record 30,000 net new locations in 2025 and annualized recurring run-rate surpassing $2.0 billion. Revenue drivers included a 22% year-over-year increase in total locations to about 164,000 and gross payment volume of $51.4 billion in the fourth quarter, while recurring gross profit grew sharply in both GAAP and non-GAAP terms.

Profitability improved markedly, with GAAP net income rising to $101 million in the fourth quarter and $342 million for 2025, alongside robust adjusted EBITDA and free cash flow gains versus 2024. On Feb. 10, 2026, the board boosted the existing share repurchase program by $500 million, signaling confidence in the company’s financial trajectory and capital-return strategy, as Toast also expanded strategic relationships, including a rollout with MTY Food Group’s Papa Murphy’s stores and a new operational partnership with Instacart.

These results underscore Toast’s growing scale in restaurant and retail-adjacent markets and its ability to convert transaction volume into recurring high-margin software and fintech earnings. The combination of strong growth, rising profitability, and incremental buyback authorization suggests a maturing business profile that could reinforce the company’s competitive positioning and appeal to both growth-focused and capital-discipline-oriented investors.

The most recent analyst rating on (TOST) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Toast Inc stock, see the TOST Stock Forecast page.

Toast appoints Rossana Niola as new Chief Accounting Officer

On January 13, 2026, Toast, Inc. announced that its Board of Directors appointed former Mastercard executive Rossana Niola as Chief Accounting Officer effective upon her expected start date of January 26, 2026, and as principal accounting officer effective March 2, 2026. Niola, who held several leadership roles at Mastercard since 2012, including Assistant Corporate Controller, will receive a $400,000 annual base salary, a $175,000 sign-on bonus, eligibility for an annual target bonus equal to 40% of base salary, and equity grants consisting of $1.5 million in restricted stock units and $1.5 million in stock options vesting over four years, underscoring Toast’s investment in strengthening its senior finance and accounting leadership. The company stated there are no special arrangements or family relationships influencing her appointment and confirmed that, following the effective dates, interim Chief Accounting Officer and principal accounting officer Ms. Gomez will return to focusing solely on her ongoing roles as President, Chief Financial Officer, and principal financial officer, signaling a transition from interim to permanent leadership structure in Toast’s accounting function.

The most recent analyst rating on (TOST) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on Toast Inc stock, see the TOST Stock Forecast page.