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Toast Inc
(NYSE:TOST)
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Rating:75Outperform
Price Target:
$33.00
▲(13.48% Upside)
Action:Reiterated
Date:06/16/26
The score is driven primarily by strengthening fundamentals (profitability and robust free cash flow) and an upbeat earnings call with upgraded 2026 guidance and continued ARR/recurring gross profit momentum. Offsetting factors are weak technical trend signals and a relatively high P/E with no dividend support.
Positive Factors
Strong free cash flow generation
Toast reversed earlier cash deficits and now produces durable free cash flow ( ~$608M in 2025 and ~$654M TTM). FCF tracks net income closely (~0.92), enabling reinvestment, opportunistic buybacks and cushioning cycles given the company's very low leverage and improving returns.
Negative Factors
Revenue growth deceleration
Revenue growth has materially slowed to ~4.8% TTM from prior double-digit years, elevating execution risk. Slower top-line expansion makes sustaining recent margin and profit improvements harder, raising sensitivity to churn, pricing pressure and competitive dynamics over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Toast reversed earlier cash deficits and now produces durable free cash flow ( ~$608M in 2025 and ~$654M TTM). FCF tracks net income closely (~0.92), enabling reinvestment, opportunistic buybacks and cushioning cycles given the company's very low leverage and improving returns.
Read all positive factors
Toast Inc Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue by different business units, revealing which areas are driving growth and where the company might be exposed to risk or opportunity.
Breaks down revenue by different business units, revealing which areas are driving growth and where the company might be exposed to risk or opportunity.
Data provided by:
The Fly
The FlyToast Inc (TOST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.10B
Dividend YieldN/A
Average Volume (3M)12.94M
Price to Earnings (P/E)42.3
Beta (1Y)1.24
Revenue Growth23.44%
EPS Growth151.36%
CountryUS
Employees5,700
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.70
Shares Outstanding516,000,000
10 Day Avg. Volume9,654,129
30 Day Avg. Volume12,937,818
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)9.73
Price to Sales (P/S)3.36
P/FCF Ratio33.99
Enterprise Value/Market Cap0.76
Enterprise Value/Revenue2.03
Enterprise Value/Gross Profit7.73
Enterprise Value/Ebitda27.65
Forecast
1Y Price Target
$34.58Price Target Upside18.91% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering21
EPS Forecast (FY)1.34
Revenue Forecast (FY)$7.39B
Toast Inc Business Overview & Revenue Model
Company Description
Toast, Inc. delivers a comprehensive cloud-based digital technology platform tailored specifically for the restaurant sector, serving businesses across the United States and Ireland. Its extensive product suite features an array of hardware soluti...
How the Company Makes Money
Toast primarily generates revenue through a combination of (1) financial technology and payments-related fees and (2) subscription and services fees tied to its software platform and add-on modules.
1) Payments / FinTech revenue: Toast acts as th...
Toast Inc Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented strong top-line growth, margin expansion and significant product and AI traction (recurring gross profit +27%, ARR +26%, SaaS margin 81%, adjusted EBITDA +35%, clear AI productivity gains and early agent monetization signals). Key challenges include hardware/professional services margin drag (negative 13% of recurring gross profit), an intentional inventory build that pressures near-term free cash flow and a $28M credit-related charge. On balance, the positive operational and financial momentum and raised guidance materially outweigh the manageable near-term headwinds.Positive Updates
Recurring gross profit and ARR growth
Recurring gross profit streams grew 27% year-over-year in Q1 2026 and ARR increased 26%, driven by strong location additions and ARPU growth.
Negative Updates
Hardware & professional services margin drag
Hardware and professional services gross profit was negative 13% of the recurring gross profit streams, reflecting higher tariff/input costs and margin pressure from hardware shipments.
Read all updates
Q1-2026 Updates
Positive
Negative
Recurring gross profit and ARR growth
Recurring gross profit streams grew 27% year-over-year in Q1 2026 and ARR increased 26%, driven by strong location additions and ARPU growth.
Read all positive updates
Company Guidance
Toast provided Q2 and upgraded full‑year 2026 guidance: for Q2 it expects total subscription and fintech gross profit to grow 22%–24% year‑over‑year and adjusted EBITDA of $185–195 million; for the full year it now expects recurring gross profit growth of 21%–23% and adjusted EBITDA of $790–810 million. Management reiterated a long‑term objective of 40%+ adjusted EBITDA margins, noted Q1 context (recurring gross profit streams grew 27% in Q1, ARR +26%, Q1 adjusted EBITDA $179M at a 34% margin, Q1 free cash flow $115M, 171K live locations, +22% YoY, GPV $51B, +22%), and said conversion of adjusted EBITDA to free cash flow will be slightly lower than in 2025 due to strategic memory‑chip purchases and higher inventory (with the majority of that cash impact in Q2).Toast Inc Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
90
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.45B | 6.15B | 4.96B | 3.87B | 2.73B | 1.71B |
| Gross Profit | 1.69B | 1.58B | 1.19B | 834.00M | 511.00M | 314.00M |
| EBITDA | 473.00M | 413.00M | 108.00M | -212.00M | -253.00M | -457.00M |
| Net Income | 412.00M | 342.00M | 19.00M | -246.00M | -275.00M | -487.00M |
Balance Sheet | ||||||
| Total Assets | 3.09B | 3.15B | 2.46B | 1.96B | 1.76B | 1.74B |
| Cash, Cash Equivalents and Short-Term Investments | 1.77B | 1.99B | 1.42B | 1.12B | 1.02B | 1.27B |
| Total Debt | 17.00M | 40.00M | 34.00M | 44.00M | 94.00M | 99.00M |
| Total Liabilities | 1.10B | 1.02B | 918.00M | 764.00M | 663.00M | 644.00M |
| Stockholders Equity | 1.99B | 2.12B | 1.54B | 1.19B | 1.10B | 1.09B |
Cash Flow | ||||||
| Free Cash Flow | 654.00M | 608.00M | 306.00M | 93.00M | -189.00M | -17.00M |
| Operating Cash Flow | 714.00M | 661.00M | 360.00M | 135.00M | -156.00M | 2.00M |
| Investing Cash Flow | -269.00M | -172.00M | -39.00M | -86.00M | -98.00M | -503.00M |
| Financing Cash Flow | -293.00M | 7.00M | 18.00M | 63.00M | 38.00M | 759.00M |
Toast Inc Technical Analysis
Positive
29.08
Price Trends
25.90
Positive
26.71
Positive
31.03
Negative
Market Momentum
1.05
Negative
69.93
Neutral
90.72
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOST, the sentiment is Positive. The current price of 29.08 is above the 20-day moving average (MA) of 26.12, above the 50-day MA of 25.90, and below the 200-day MA of 31.03, indicating a neutral trend. The MACD of 1.05 indicates Negative momentum. The RSI at 69.93 is Neutral, neither overbought nor oversold. The STOCH value of 90.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOST.
Toast Inc Risk Analysis
Toast Inc disclosed 59 risk factors in its most recent earnings report. Toast Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Toast Inc Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.41B | 35.29 | 10.01% | ― | 7.19% | -36.03% | |
76 Outperform | $23.64B | 33.86 | 19.88% | ― | 9.69% | 15.58% | |
75 Outperform | $17.10B | 42.30 | 20.74% | ― | 23.44% | 151.36% | |
69 Neutral | $1.78B | 711.16 | 0.27% | ― | 23.39% | -94.59% | |
64 Neutral | $14.17B | 52.71 | -37.79% | ― | 13.04% | 1894.19% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $4.08B | 36.93 | 6.42% | ― | 28.28% | -72.43% |
* Technology Sector Average
TOST
Toast Inc
29.61
-13.93
-31.99%
FFIV
F5, Inc.
417.11
114.70
37.93%
NTNX
Nutanix
53.76
-22.37
-29.38%
FOUR
Shift4 Payments
51.16
-51.40
-50.12%
PAYO
Payoneer
7.10
0.35
5.19%
MQ
Marqeta
15.93
-7.75
-32.73%
Toast Inc Corporate Events
Executive/Board ChangesShareholder Meetings
Toast Shareholders Back Directors, Auditors and Executive Pay
Positive
Jun 15, 2026
On June 12, 2026, Toast Inc. held its annual meeting of stockholders via live audio webcast, where investors elected Kent Bennett, Susan Chapman-Hughes and Mark Hawkins as Class II directors for three-year terms ending at the 2029 annual meeting. ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.