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Toast Inc
(NYSE:TOST)
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Rating:79Outperform
Price Target:
$39.00
▲(34.30% Upside)
Action:Reiterated
Date:08/05/26
TOST scores well primarily on strengthening financial performance (profitability and cash flow with a very strong, low-debt balance sheet) and a bullish earnings update with raised guidance and strong recurring-growth metrics. Technicals are supportive but somewhat overextended, while valuation (P/E ~46) is the main offset and increases sensitivity to any slowdown or margin/cash-flow pressure.
Positive Factors
Low leverage & strong capital base
Toast’s near‑zero debt and materially improved ROE (~23.8% TTM) provide durable financial flexibility. Low leverage enables continued product investment, share repurchases or opportunistic M&A and creates a buffer in downturns, supporting long‑term strategic optionality.
Negative Factors
Slowing revenue growth & low gross margin
Revenue growth has materially decelerated to ~5.6% TTM while gross margin remains modest (~26.7% TTM) for a software‑centric platform. Modest gross margins limit operating leverage and force heavier reliance on cross‑sell, new TAMs or fintech take‑rate expansion to sustain future margin and earnings progression.
Read all positive and negative factors
Positive Factors
Negative Factors
Low leverage & strong capital base
Toast’s near‑zero debt and materially improved ROE (~23.8% TTM) provide durable financial flexibility. Low leverage enables continued product investment, share repurchases or opportunistic M&A and creates a buffer in downturns, supporting long‑term strategic optionality.
Read all positive factors
Toast Inc Key Performance Indicators (KPIs)
Any
Gross Payment Volume
Measures the total dollar value of transactions processed, indicating the scale of operations and market reach, as well as potential revenue growth.
Measures the total dollar value of transactions processed, indicating the scale of operations and market reach, as well as potential revenue growth.
Data provided by:
The Fly
The FlyToast Inc (TOST) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.72B
Dividend YieldN/A
Average Volume (3M)12.41M
Price to Earnings (P/E)46.1
Beta (1Y)1.30
Revenue Growth23.44%
EPS Growth151.36%
CountryUS
Employees6,500
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.83
Shares Outstanding516,000,000
10 Day Avg. Volume9,119,135
30 Day Avg. Volume12,414,135
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$39.15Price Target Upside34.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering25
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:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call emphasized broad top-line growth, margin expansion and strong product and go-to-market momentum (record location adds, high ARR and recurring gross profit growth, GPV growth, robust adjusted EBITDA improvement, and rapid early traction for AI-driven product Toast IQ Grow). Primary headwinds are hardware/memory-cost pressure, higher near-term operating investment and strategic inventory build impacting free cash flow. Management presented clear mitigation plans for hardware costs, raised full-year guidance for recurring gross profit and adjusted EBITDA, and signaled confidence in longer-term margin upside driven by core leverage and AI-driven efficiency.Positive Updates
Strong Recurring Gross Profit Growth
Recurring gross profit streams grew ~28% year-over-year in Q2, driving top-line strength and forming the basis for raised full-year recurring gross profit guidance of 23%–25%.
Negative Updates
Hardware & Professional Services Drag
Hardware and professional services gross profit was negative and represented an 11% drag on recurring gross profit streams in the quarter, reflecting material pressure in hardware margins.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Recurring Gross Profit Growth
Recurring gross profit streams grew ~28% year-over-year in Q2, driving top-line strength and forming the basis for raised full-year recurring gross profit guidance of 23%–25%.
Read all positive updates
Company Guidance
Guidance: For Q3 Toast expects total subscription and fintech gross profit to grow 22–24% year‑over‑year and adjusted EBITDA of $210–220M; it raised full‑year 2026 guidance to recurring gross profit growth of 23–25% and adjusted EBITDA of $805–825M. Management framed that outlook on strong Q2 results (ARR +25%, recurring gross profit streams +28%, adjusted EBITDA $221M (37% margin), GAAP operating income $152M (26% margin), recurring gross profit growth + operating margin = 57% “Rule of 50”), record net adds of ~9,500 locations (total ~180K, +22% YoY), GPV $61B (+22%) with a 98 bps take rate, SaaS ARR +27%, subscription gross profit +32%, payments ARR +23%, fintech gross profit +26%, and a fintech net take of 59 bps (payments 50 bps); they expect free cash flow conversion to improve in H2, are reinvesting a ~$10M tariff refund into growth, and see a path to 40%+ long‑term adjusted EBITDA margins.Toast Inc Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
90
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.80B | 6.15B | 4.96B | 3.87B | 2.73B | 1.71B |
| Gross Profit | 1.81B | 1.58B | 1.19B | 834.00M | 511.00M | 314.00M |
| EBITDA | 538.00M | 413.00M | 108.00M | -212.00M | -253.00M | -457.00M |
| Net Income | 486.00M | 342.00M | 19.00M | -246.00M | -275.00M | -487.00M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 3.15B | 2.46B | 1.96B | 1.76B | 1.74B |
| Cash, Cash Equivalents and Short-Term Investments | 1.71B | 1.99B | 1.42B | 1.12B | 1.02B | 1.27B |
| Total Debt | 0.00 | 40.00M | 34.00M | 44.00M | 94.00M | 99.00M |
| Total Liabilities | 1.14B | 1.02B | 918.00M | 764.00M | 663.00M | 644.00M |
| Stockholders Equity | 2.04B | 2.12B | 1.54B | 1.19B | 1.10B | 1.09B |
Cash Flow | ||||||
| Free Cash Flow | 576.00M | 608.00M | 306.00M | 93.00M | -189.00M | -17.00M |
| Operating Cash Flow | 635.00M | 661.00M | 360.00M | 135.00M | -156.00M | 2.00M |
| Investing Cash Flow | -298.00M | -172.00M | -39.00M | -86.00M | -98.00M | -503.00M |
| Financing Cash Flow | -456.00M | 7.00M | 18.00M | 63.00M | 38.00M | 759.00M |
Toast Inc Technical Analysis
Positive
29.04
Price Trends
27.96
Positive
27.33
Positive
30.35
Positive
Market Momentum
1.60
Negative
74.02
Negative
89.11
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 29.04 is below the 20-day moving average (MA) of 30.96, above the 50-day MA of 27.96, and below the 200-day MA of 30.35, indicating a bullish trend. The MACD of 1.60 indicates Negative momentum. The RSI at 74.02 is Negative, neither overbought nor oversold. The STOCH value of 89.11 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 | $22.71B | 31.70 | 19.86% | ― | 9.41% | 10.59% | |
80 Outperform | $2.42B | 35.64 | 10.01% | ― | 7.19% | -36.03% | |
79 Outperform | $18.72B | 46.10 | 20.74% | ― | 23.44% | 151.36% | |
71 Outperform | $1.84B | 775.00 | 0.27% | ― | 23.39% | -94.59% | |
67 Neutral | $15.95B | 57.85 | -37.79% | ― | 13.04% | 1894.19% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $4.20B | 59.15 | 6.42% | ― | 28.28% | -72.43% |
* Technology Sector Average
TOST
Toast Inc
34.80
-11.14
-24.25%
FFIV
F5, Inc.
411.32
90.09
28.05%
NTNX
Nutanix
60.96
-14.74
-19.47%
FOUR
Shift4 Payments
53.38
-28.82
-35.06%
PAYO
Payoneer
7.12
-0.30
-4.04%
MQ
Marqeta
16.66
-6.06
-26.67%
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.