Toast Inc (TOST) AI Stock Analysis

• Market Cap: $24.63B
• Dividend Yield: N/A
• Average Volume (3M): 7.42M
• Price to Earnings (P/E): 180.6
• Beta (1Y): 1.59
• Revenue Growth: 26.72%
• EPS Growth: N/A
• Country: US
• Employees: 5,700
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 0.20
• Shares Outstanding: 498,000,000
• 10 Day Avg. Volume: 5,116,697
• 30 Day Avg. Volume: 7,416,972
• PEG Ratio: 0.77
• Price to Book (P/B): 8.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -48.82
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 1.61
• Enterprise Value/Gross Profit: 24.09
• Enterprise Value/Ebitda: 168.52
• 1Y Price Target: $44.94
• Price Target Upside: 5.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

• Rating: 76 Outperform
• Price Target: $51.00 ▲(19.77%Upside)

Toast Inc. exhibits strong financial growth and operational efficiency, marked by improved profitability and cash flow. The positive earnings call provided further confidence in its strategic direction, although valuation concerns due to a high P/E ratio suggest caution. Technical indicators show robust momentum but raise potential concerns of being overbought. Monitoring future growth and profitability will be key to sustaining its current trajectory.

Positive Factors

Financial Performance

Toast's first-quarter revenue grew 24% year-over-year, and ARR of $1.71 billion grew 31%, indicating strong growth performance.

Market Expansion

Expansion into new markets is progressing well, with international offerings and product innovation driving stronger inbound demand.

Strategic Wins

Toast's progress with enterprise brands continued, including announcing Applebee's for roughly 1,500 locations, the largest Toast customer win to date, and winning Topgolf for a wide range of software along with payments for close to 100 locations in the U.S.

Negative Factors

Macroeconomic Risks

The FY25 guidance assumes significant resilience from SMB restaurants, which could be at risk if there is a macroeconomic downturn, affecting Toast, Inc.'s growth.

Valuation Concerns

There is limited room for missteps in the long term, as valuation leaves little margin for error, maintaining a Neutral rating on the stock.

Toast Inc Business Overview & Revenue Model

Company Description

Toast Inc (TOST) is a leading cloud-based restaurant management platform that provides an array of software as a service (SaaS) solutions tailored to the restaurant industry. The company offers a comprehensive suite of products that include point of sale (POS) systems, payment processing, and various management tools designed to improve efficiency and profitability for restaurant operators. Toast's platform is designed to streamline operations, enhance customer experience, and provide data-driven insights to its clients.

How the Company Makes Money

Toast Inc makes money primarily through the sale and subscription of its SaaS products, which include point of sale systems and software solutions tailored for restaurant operations. Revenue is generated from a combination of subscription fees for its software tools, and transaction-based fees through its payment processing services. Additionally, Toast generates revenue from hardware sales, such as terminals and peripherals needed for its POS systems. The company also benefits from partnerships with third-party service providers, which can lead to additional integration fees and enhanced service offerings for its users. These diversified revenue streams enable Toast to maintain a robust financial model centered around the growing demand for technology-driven restaurant management solutions.

Toast Inc Financial Statement Overview

Summary

Toast Inc. presents a strong financial outlook characterized by rapid revenue growth, improved profitability, and solid cash flow generation. The firm's low debt levels and strong equity base position it well for future expansion. However, monitoring the growth in liabilities and maintaining profitability will be crucial for sustaining long-term financial health.

Income Statement

Toast Inc. has demonstrated robust revenue growth, with a significant increase from $823 million in 2020 to $5.2 billion in TTM (Trailing-Twelve-Months). The company has also improved its gross profit margin, reaching approximately 24.6% in TTM. Notably, the net profit margin turned positive at about 3% in TTM, indicating improved profitability. Despite prior losses, the company has achieved positive EBIT and EBITDA margins, showcasing operational efficiency.

Balance Sheet

The balance sheet reflects a strong financial position with a substantial stockholders' equity of $1.67 billion and a low debt-to-equity ratio of 0.01 in TTM, indicating low financial leverage. The equity ratio is healthy at approximately 65.2%, highlighting a stable capital structure. However, the total liabilities have grown, necessitating monitoring of leverage trends.

Cash Flow

Toast Inc. has shown impressive cash flow management, with operating cash flow increasing significantly to $459 million in TTM. The free cash flow has also grown, with a notable free cash flow to net income ratio. The company has effectively converted its operating activities into cash, supporting its growth and operational needs.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.22B	4.96B	3.87B	2.73B	1.71B	823.13M
	Gross Profit
1.29B	1.19B	834.00M	511.00M	314.00M	140.41M
	EBIT
118.00M	16.00M	-287.00M	-384.00M	-228.00M	-220.15M
	EBITDA
167.00M	108.00M	-255.00M	-360.00M	-207.00M	-208.22M
	Net Income Common Stockholders
158.00M	19.00M	-246.00M	-275.00M	-487.00M	-248.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.49B	1.42B	1.12B	1.02B	1.27B	581.82M
	Total Assets
2.56B	2.41B	1.96B	1.76B	1.74B	775.96M
	Total Debt
22.00M	24.00M	44.00M	94.00M	99.00M	171.71M
	Net Debt
-983.00M	-879.00M	-561.00M	-453.00M	-710.00M	-410.12M
	Total Liabilities
891.00M	863.00M	764.00M	663.00M	644.00M	1.25B
	Stockholders Equity
1.67B	1.54B	1.19B	1.10B	1.09B	-470.98M
Cash Flow		Free Cash Flow
408.00M	306.00M	93.00M	-189.00M	-17.00M	-160.71M
	Operating Cash Flow
459.00M	360.00M	135.00M	-156.00M	2.00M	-124.63M
	Investing Cash Flow
12.00M	-39.00M	-86.00M	-98.00M	-503.00M	-35.86M
	Financing Cash Flow
18.00M	18.00M	63.00M	38.00M	759.00M	594.50M

Toast Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 42.58 is below the 20-day moving average (MA) of 42.59, above the 50-day MA of 39.65, and above the 200-day MA of 35.96, indicating a neutral trend. The MACD of 0.61 indicates Positive momentum. The RSI at 53.03 is Neutral, neither overbought nor oversold. The STOCH value of 32.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOST.

Toast Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOST	76 Outperform	$24.63B	180.60	11.06%	―	26.72%	―
FOUR	74 Outperform	$8.14B	31.05	30.28%	―	27.39%	115.40%
PAYO	73 Outperform	$2.36B	21.84	15.97%	―	14.86%	-0.94%
MQ	68 Neutral	$2.58B	54.94	5.01%	―	-8.44%	―
NTNX	66 Neutral	$19.73B	105,128.57	6.85%	―	16.11%	―
DBX	65 Neutral	$7.97B	18.61	-60.11%	―	0.79%	0.59%
Sector *	62 Neutral	$11.91B	9.99	-7.22%	4.96%	7.31%	-8.91%

Toast Inc Corporate Events

Toast Inc Holds Annual Stockholders Meeting

On June 13, 2025, Toast Inc held its annual meeting of stockholders via live audio webcast. During the meeting, stockholders voted on three proposals. Paul Bell and Hilarie Koplow-McAdams were elected as Class I directors for a three-year term. Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, the compensation of the company’s named executive officers for the fiscal year ended December 31, 2024, was approved on an advisory, non-binding basis.

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