Toast Inc (TOST) AI Stock Analysis

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Toast Inc

(NYSE:TOST)

76Outperform

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

Earnings

Toast, Inc. reported a broad-based 1Q beat and raised its FY25 guidance, indicating confidence in future growth and performance.

Financial Performance

Toast, Inc. demonstrated strong financial performance with first-quarter revenue growing 24% year-over-year and ARR increasing by 31%, highlighting robust growth.

Market Expansion

Toast's expansion into new markets is progressing well, with expectations to surpass 10K locations in 2025 and successful international offerings.

Negative Factors

Economic Environment

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

Growth Limitations

Slight location and volume misses suggest that locations are mildly slowing due to the law of large numbers, potentially impacting growth.

Toast Inc (TOST) vs. S&P 500 (SPY)

Market Cap

$25.84B

Dividend YieldN/A

Average Volume (3M)8.24M

Price to Earnings (P/E)190.5

Beta (1Y)1.56

Revenue Growth26.72%

EPS GrowthN/A

CountryUS

Employees5,700

SectorTechnology

Sector Strength77

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.20

Shares Outstanding498,000,000

10 Day Avg. Volume11,163,946

30 Day Avg. Volume8,235,652

Financial Highlights & Ratios

PEG Ratio11.99

Price to Book (P/B)15.04

Price to Sales (P/S)0.00

P/FCF Ratio77.15

Enterprise Value/Market Cap0.88

Enterprise Value/Revenue1.25

Enterprise Value/Gross Profit19.10

Enterprise Value/Ebitda-143.85

Forecast

1Y Price Target

$44.56

Price Target Upside-0.25% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering20

Toast Inc Business Overview & Revenue Model

Company DescriptionToast Inc (TOST) is a leading cloud-based technology platform that serves the restaurant industry. The company offers an all-in-one point-of-sale (POS) system designed to optimize restaurant operations, enhance guest experiences, and boost efficiency. Toast's platform includes software for managing orders, payments, inventory, employee management, and customer relationship management, all tailored to meet the specific needs of restaurant businesses.

How the Company Makes MoneyToast 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 Key Performance Indicators (KPIs)

Any

Gross Payment Volume

Gross Payment Volume
Tracks the total dollar value of transactions processed, reflecting the scale of the company's payment processing operations and its market reach.

Chart InsightsToast Inc.'s Gross Payment Volume has shown consistent growth, driven by the addition of over 6,000 net locations and strategic enterprise wins. Despite a 22% year-over-year GPV increase, challenges persist with a 3% decline in GPV per location. However, the company's robust expansion into international markets and advancements in AI are expected to sustain momentum. The raised full-year outlook and anticipated record net additions in Q2 reflect strong confidence in continued growth, despite facing tariff-related cost pressures.

Data provided by:

Main Street Data

Toast Inc Financial Statement Overview

Summary

Toast Inc. has demonstrated strong financial performance with significant revenue and profit growth, improved margins, and excellent cash flow generation. The balance sheet remains strong with low leverage, positioning the company well for future growth. However, the return on equity, while improved, indicates room for further profitability enhancement.

Income Statement

Very Positive

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

Positive

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

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Positive

Last Price44.67

Price Trends

50DMA

36.05

Positive

100DMA

37.16

Positive

200DMA

34.03

Positive

Market Momentum

MACD

2.70

Negative

RSI

72.76

Negative

STOCH

90.36

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 44.67 is above the 20-day moving average (MA) of 39.04, above the 50-day MA of 36.05, and above the 200-day MA of 34.03, indicating a bullish trend. The MACD of 2.70 indicates Negative momentum. The RSI at 72.76 is Negative, neither overbought nor oversold. The STOCH value of 90.36 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 60 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

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOUR	77 Outperform	$7.97B	30.44	30.28%	―	27.39%	115.40%
TOST	76 Outperform	$25.84B	190.49	11.06%	―	26.72%	―
NTNX	76 Outperform	$22.15B	―	6.85%	―	14.82%	14.06%
DBX	75 Outperform	$8.08B	18.84	-60.11%	―	0.79%	0.59%
PAYO	74 Outperform	$2.58B	24.05	15.97%	―	14.86%	-0.94%
MQ	71 Outperform	$2.45B	52.24	5.01%	―	-8.44%	―
Sector *	60 Neutral	$11.59B	10.34	-7.15%	2.94%	7.49%	-10.88%

* Technology Sector Average

Performance Comparison

TOST

Toast Inc

44.32

17.79

67.06%

NTNX

Nutanix

81.42

8.05

10.97%

DBX

Dropbox

28.67

5.04

21.33%

FOUR

Shift4 Payments

90.26

22.42

33.05%

PAYO

Payoneer

7.19

1.23

20.64%

Marqeta

5.22

-0.19

-3.51%

Toast Inc Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 21.88%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in locations, enterprise wins, and advancements in AI, leading to an increased financial outlook. Despite some challenges with GPV per location and tariff expenses, the overall performance and strategic achievements supported a positive sentiment.

Q1-2025 Updates

Positive Updates

Strong Q1 Performance

Toast added over 6,000 net locations in Q1, with recurring gross profit streams growing 37% year-over-year. Adjusted EBITDA grew to $133 million, and GAAP operating income was $43 million.

Key Enterprise Wins

Toast secured significant enterprise deals, including marquee wins with Applebee's and Topgolf, demonstrating the platform's ability to handle large-scale operations.

International and New Market Growth

Toast is on track to cross 10,000 locations across international, food and beverage retail, and enterprise segments in 2025, with strong momentum in these areas.

AI and Data Advancements

The launch of ToastIQ and ongoing pilots of Sous Chef AI solutions are showing promising early results, with improvements in order volumes and advertising returns for clients.

Increased Full Year Outlook

Toast raised its full-year guidance, expecting 26% growth in fintech and subscription gross profit, and $550 million in adjusted EBITDA with a margin of 31%.

Negative Updates

Moderate GPV Growth

Gross Payment Volume (GPV) grew 22% year-over-year, with GPV per location down 3% versus last year, indicating some challenges in maintaining per-location transaction volumes.

Tariff Concerns

Toast anticipates slightly higher tariff expenses related to hardware, which could impact cost management and pricing strategies.

Company Guidance

During Toast's First Quarter 2025 Earnings Conference Call, the company provided robust guidance for the upcoming periods based on their strong Q1 performance. They reported a 37% year-over-year growth in recurring gross profit streams and a $133 million increase in adjusted EBITDA, with a GAAP operating income of $43 million. CEO Aman Narang highlighted the addition of over 6,000 net locations in Q1, contributing to their 140,000 customer locations globally. The company raised its full-year 2025 outlook due to this strong performance, anticipating record net additions in Q2. Additionally, Toast is on track to cross 10,000 locations across international markets, food and beverage retail, and enterprise segments in 2025. Their financial guidance for the second quarter and full year 2025 reflects confidence in maintaining growth despite a dynamic macroeconomic environment, with expectations for adjusted EBITDA to reach $550 million and a margin of 31%.

Toast Inc Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Toast Inc Appoints Gail Miller as Chief Accounting Officer

Neutral

Feb 14, 2025

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.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.