Toast Inc (TOST) AI Stock Analysis

• Market Cap: $20.81B
• Dividend Yield: N/A
• Average Volume (3M): 6.63M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.56
• Revenue Growth: 28.33%
• EPS Growth: N/A
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 67
• Industry: Software - Infrastructure
• EPS (TTM): 0.18
• Shares Outstanding: 497,386,080
• 10 Day Avg. Volume: 6,392,396
• 30 Day Avg. Volume: 6,634,999
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 17.22
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $42.84
• Price Target Upside: 19.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

Toast Inc. demonstrates strong financial performance with significant growth in revenue and profitability, supported by a solid balance sheet. The technical indicators suggest caution due to mixed signals, while the valuation appears stretched. The positive sentiment from the recent earnings call and strong guidance further bolster the outlook, leading to an overall favorable stock score.

Positive Factors

Financial Performance

Toast reported 4Q results with total revenue 2% ahead of our forecast and adjusted EBITDA 16% above our forecast.

Market Expansion

Toast is gaining traction in new markets and expects to surpass 10K locations across new markets in 2025, with recent wins including Hilton Hotels and Ascent Brands.

Strategic Partnerships

The agreement with Dine Brands Global, Inc., to implement Toast technology at Applebee’s locations nationwide represents the largest chain win by Toast so far.

Negative Factors

Guidance Outlook

TOST's initial 2025 guidance for recurring gross profit growth was slightly softer compared to consensus expectations.

Market Penetration

The win of Applebee’s is not necessarily meaningful to Toast's base of 134k locations.

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 the sale of its software and hardware solutions to restaurants. The company's key revenue streams include subscription fees for its cloud-based software services, transaction-based fees derived from payment processing services, and sales of hardware, such as POS terminals and related devices. Additionally, Toast offers value-added services like marketing and loyalty programs, which contribute to its revenue. The company benefits from strong partnerships with payment processors and leverages its extensive network of restaurant clients to drive growth.

Toast Inc Financial Statement Overview

Summary

Toast Inc. has exhibited strong financial performance with impressive revenue growth, improved profit margins, and excellent cash flow generation. The balance sheet shows low leverage and a solid equity base. Although the return on equity is modest, it indicates improvement and potential for further profitability enhancements.

Income Statement

Toast Inc. has shown impressive revenue growth, with a TTM revenue of $4.96 billion compared to $3.865 billion in the previous year, reflecting a strong growth trajectory. The gross profit margin has improved to 23.99%, and the company has achieved a positive net profit margin of 0.4% in the TTM period, a significant turnaround from previous negative margins. The EBIT and EBITDA margins have also turned positive, indicating improved operational efficiency.

Balance Sheet

The company's balance sheet shows a solid equity base with a debt-to-equity ratio of 0.02, indicating low leverage. Toast has a strong equity ratio of 64.16%, reflecting financial stability. The return on equity stands at 1.29%, suggesting modest profitability relative to equity, but an improvement from past years.

Cash Flow

Toast Inc. has demonstrated robust cash flow management, with a significant increase in operating cash flow to $360 million and a free cash flow of $306 million in the TTM period, reflecting a 229% growth from the previous year. The operating cash flow to net income ratio of 18 suggests efficient cash generation relative to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.96B	3.87B	2.73B	1.71B	823.13M
	Gross Profit
1.19B	834.00M	511.00M	314.00M	140.41M
	EBIT
16.00M	-287.00M	-384.00M	-228.00M	-220.15M
	EBITDA
108.00M	-255.00M	-360.00M	-207.00M	-208.22M
	Net Income Common Stockholders
19.00M	-246.00M	-275.00M	-487.00M	-248.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.42B	1.12B	1.02B	1.27B	581.82M
	Total Assets
2.41B	1.96B	1.76B	1.74B	775.96M
	Total Debt
24.00M	44.00M	94.00M	99.00M	171.71M
	Net Debt
-879.00M	-561.00M	-453.00M	-710.00M	-410.12M
	Total Liabilities
863.00M	764.00M	663.00M	644.00M	1.25B
	Stockholders Equity
1.54B	1.19B	1.10B	1.09B	-470.98M
Cash Flow		Free Cash Flow
306.00M	93.00M	-189.00M	-17.00M	-160.71M
	Operating Cash Flow
360.00M	135.00M	-156.00M	2.00M	-124.63M
	Investing Cash Flow
-39.00M	-86.00M	-98.00M	-503.00M	-35.86M
	Financing Cash Flow
18.00M	63.00M	38.00M	759.00M	594.50M

Toast Inc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 35.84
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• 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 35.84 is above the 20-day moving average (MA) of 34.70, above the 50-day MA of 34.79, and above the 200-day MA of 33.21, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 51.02 is Neutral, neither overbought nor oversold. The STOCH value of 54.93 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
FOUR	76 Outperform	$7.30B	27.95	30.28%	―	27.39%	115.40%
TOST	75 Outperform	$20.81B	―	1.46%	―	28.33%	―
PAYO	74 Outperform	$2.61B	22.10	17.45%	―	17.64%	30.75%
DBX	73 Outperform	$8.24B	20.67	-60.11%	―	1.86%	6.21%
NTNX	70 Outperform	$19.34B	―	6.85%	―	14.82%	14.06%
MQ	61 Neutral	$1.81B	80.68	2.34%	―	-25.02%	―
Sector *	60 Neutral	$10.78B	10.47	-6.71%	2.99%	7.58%	-12.08%

Toast Inc Corporate Events

Toast Inc Appoints Gail Miller as Chief Accounting Officer

On February 12, 2025, Toast, Inc. appointed Gail Miller as its new Chief Accounting Officer and principal accounting officer, effective March 3, 2025. Previously, she held the same role at Remitly Global, Inc., and Shift4 Payments, Inc. This appointment symbolizes a strategic move for Toast, with Miller receiving a comprehensive compensation package including a base salary, sign-on bonus, and stock options. Concurrently, Elena Gomez was appointed as the President of the Company, transitioning from her role as interim Chief Accounting Officer.