Toast Shows Revenue Growth Amidst Restaurant Stock Slump
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy TOST?
Source: NASDAQ.COM
- Significant Revenue Growth: Toast achieved $1.6 billion in revenue for Q3 2025, marking a 25% increase, demonstrating resilience and growth potential despite pressures in the overall restaurant industry.
- Profitability Improvement: The company reported diluted earnings per share (EPS) of $0.16, surging 128% year-over-year, reflecting effective cost control and business expansion strategies that bolster investor confidence.
- Expanding Customer Base: Toast's annualized recurring revenue (ARR) increased by 30% to $2 billion, with total locations rising 23% to 156,000, indicating widespread acceptance of its products and strong market demand in the restaurant sector.
- Strategic Partnerships: The company established multi-year strategic partnerships with Uber and Instacart, further expanding its market influence and business scope, laying a solid foundation for future growth.
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Analyst Views on TOST
Wall Street analysts forecast TOST stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TOST is 47.00 USD with a low forecast of 36.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
13 Buy
8 Hold
0 Sell
Moderate Buy
Current: 28.020
Low
36.00
Averages
47.00
High
60.00
Current: 28.020
Low
36.00
Averages
47.00
High
60.00
About TOST
Toast, Inc. is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. It provides a platform of software-as-a-service (SaaS) products and financial technology solutions, including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. It serves as the restaurant operating system, connecting front of house and back of house operations across service models including dine-in, takeout, delivery, catering, and retail. Its products include point-of-sale (POS) & restaurant operations, marketing, online ordering & delivery, team management, vendor management, retail, and financial technology solutions. Its in-store POS and restaurant operations offerings are built to help reduce time to take an order, optimize operations, and handle payments. Its marketing products provide integrated solutions to deliver targeted email and SMS campaigns, build loyalty programs, offer gift cards, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Toast Scheduled to Announce Q4 Earnings on February 12th
- Earnings Announcement Date: Toast is set to release its Q4 2023 earnings on February 12th after market close, with consensus EPS estimates at $0.24 and revenue expected to reach $1.62 billion, reflecting a 20.9% year-over-year growth, which will provide crucial insights into the company's financial health.
- Historical Performance Review: Over the past two years, Toast has not missed EPS estimates, achieving a 0% miss rate, while it has successfully met revenue estimates 75% of the time, indicating a relatively stable performance that may bolster market confidence in its future results.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen no upward revisions and two downward adjustments, while revenue estimates experienced three upward revisions and one downward, suggesting mixed market sentiment regarding Toast's growth prospects, which could influence investor decisions.
- Market Rating Changes: J.P. Morgan has upgraded Toast's rating, citing an optimistic outlook for 2026, particularly as the company shifts from a growth-at-all-costs approach to a focus on disciplined, high-margin scaling, which may attract increased investor interest.
See More
Toast's Resilient Growth Amid Industry Challenges
- Significant Revenue Growth: Toast achieved $1.6 billion in revenue for Q3, marking a 25% increase, while diluted earnings per share (EPS) surged 128% to $0.16, demonstrating the company's robust performance amid industry challenges.
- Recurring Revenue Increase: The annualized recurring revenue (ARR) run rate rose 30% to $2 billion, indicating the sustainability of its business model and increasing customer retention.
- Customer Base Expansion: The total number of locations increased by 23% to 156,000, with large operators like TGI Fridays joining, further solidifying Toast's market position.
- Strategic Partnerships: Toast established multi-year strategic partnerships with Uber and Instacart, expanding its market influence and business scope, and despite the overall challenges in the restaurant industry, Toast's outlook remains optimistic.
See More
Toast Shows Revenue Growth Amidst Restaurant Stock Slump
- Significant Revenue Growth: Toast achieved $1.6 billion in revenue for Q3 2025, marking a 25% increase, demonstrating resilience and growth potential despite pressures in the overall restaurant industry.
- Profitability Improvement: The company reported diluted earnings per share (EPS) of $0.16, surging 128% year-over-year, reflecting effective cost control and business expansion strategies that bolster investor confidence.
- Expanding Customer Base: Toast's annualized recurring revenue (ARR) increased by 30% to $2 billion, with total locations rising 23% to 156,000, indicating widespread acceptance of its products and strong market demand in the restaurant sector.
- Strategic Partnerships: The company established multi-year strategic partnerships with Uber and Instacart, further expanding its market influence and business scope, laying a solid foundation for future growth.
See More
Software Companies Face AI Disruption
- Market Reaction Analysis: Following the launch of Anthropic's Claude Cowork, software companies like Shopify, Monday.com, and Fastly saw stock declines of 23%, 15%, and 16% respectively, indicating investor concerns over AI potentially replacing traditional software, which may lead to a reevaluation of investment strategies.
- Industry Trend Observation: Despite surging AI spending and major players like Meta and Alphabet pushing forward, the future of software companies remains uncertain, particularly for those reliant on single-function products, which may face greater risks of obsolescence.
- Job Market Dynamics: Recent data shows that January layoffs reached the highest level since 2009, with job openings falling to the lowest since 2020, reflecting adjustments in labor demand as companies navigate economic recovery, potentially linked to the rise of AI technologies.
- Investment Strategy Adjustment: Analysts recommend focusing on mission-critical software companies like CrowdStrike and Toast, which may remain stable amid the AI wave due to their essential business functions, urging investors to be selective in navigating market volatility.
See More
Discussion on Potential Merger Between SpaceX and xAI
- Merger Prospects: The potential merger between SpaceX and xAI has garnered market attention, particularly with SpaceX's anticipated IPO in 2026, as this merger could attract investor interest and enhance the IPO's appeal.
- Capital Market Competition: Currently, companies like OpenAI and Anthropic are also vying for entry into the capital markets, highlighting the fierce competition among large capital-intensive firms for IPOs, and the merger of SpaceX and xAI could enhance their market attractiveness in this context.
- Investor Confidence: Although the market remains cautious about mergers involving Elon Musk's companies, analysts believe that such a merger could provide these firms with greater resource and capital liquidity, helping them achieve better valuations ahead of their IPOs.
- Technological Integration Potential: If SpaceX and xAI successfully merge, it could create a powerful technological ecosystem that leverages AI to enhance innovation in aerospace and transportation, thereby gaining a competitive edge in future market dynamics.
See More
Software Companies Face AI Disruption
- Significant Market Reaction: Following Anthropic's launch of Claude Cowork, software companies like Shopify, Monday.com, and Fastly saw stock declines of 23%, 15%, and 15% respectively, indicating investor concerns over AI potentially replacing traditional software, which could lead to a reevaluation of these companies' long-term value.
- Surge in AI Spending: While AI spending continues to rise, software companies are facing intensified competitive pressures, particularly those reliant on single-function offerings like HubSpot and Atlassian, which may experience greater market disruption, impacting their future profitability.
- Clear Industry Differentiation: Analysts categorize software companies into three groups: large software leaders like Microsoft, critical ecosystem companies like Shopify, and those with singular functions, with the latter facing higher risks in the wake of AI advancements, potentially leading to market share erosion.
- Job Market Fluctuations: Recent data shows that layoffs in January 2026 reached the highest level since 2009, and while the overall unemployment rate remains within historical averages, this trend may reflect companies adjusting their hiring strategies in light of AI investments and efficiency improvements, affecting future recruitment plans.
See More
Toast Scheduled to Announce Q4 Earnings on February 12th
- Earnings Announcement Date: Toast is set to release its Q4 2023 earnings on February 12th after market close, with consensus EPS estimates at $0.24 and revenue expected to reach $1.62 billion, reflecting a 20.9% year-over-year growth, which will provide crucial insights into the company's financial health.
- Historical Performance Review: Over the past two years, Toast has not missed EPS estimates, achieving a 0% miss rate, while it has successfully met revenue estimates 75% of the time, indicating a relatively stable performance that may bolster market confidence in its future results.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen no upward revisions and two downward adjustments, while revenue estimates experienced three upward revisions and one downward, suggesting mixed market sentiment regarding Toast's growth prospects, which could influence investor decisions.
- Market Rating Changes: J.P. Morgan has upgraded Toast's rating, citing an optimistic outlook for 2026, particularly as the company shifts from a growth-at-all-costs approach to a focus on disciplined, high-margin scaling, which may attract increased investor interest.
See More
Toast's Resilient Growth Amid Industry Challenges
- Significant Revenue Growth: Toast achieved $1.6 billion in revenue for Q3, marking a 25% increase, while diluted earnings per share (EPS) surged 128% to $0.16, demonstrating the company's robust performance amid industry challenges.
- Recurring Revenue Increase: The annualized recurring revenue (ARR) run rate rose 30% to $2 billion, indicating the sustainability of its business model and increasing customer retention.
- Customer Base Expansion: The total number of locations increased by 23% to 156,000, with large operators like TGI Fridays joining, further solidifying Toast's market position.
- Strategic Partnerships: Toast established multi-year strategic partnerships with Uber and Instacart, expanding its market influence and business scope, and despite the overall challenges in the restaurant industry, Toast's outlook remains optimistic.
See More
Toast Shows Revenue Growth Amidst Restaurant Stock Slump
- Significant Revenue Growth: Toast achieved $1.6 billion in revenue for Q3 2025, marking a 25% increase, demonstrating resilience and growth potential despite pressures in the overall restaurant industry.
- Profitability Improvement: The company reported diluted earnings per share (EPS) of $0.16, surging 128% year-over-year, reflecting effective cost control and business expansion strategies that bolster investor confidence.
- Expanding Customer Base: Toast's annualized recurring revenue (ARR) increased by 30% to $2 billion, with total locations rising 23% to 156,000, indicating widespread acceptance of its products and strong market demand in the restaurant sector.
- Strategic Partnerships: The company established multi-year strategic partnerships with Uber and Instacart, further expanding its market influence and business scope, laying a solid foundation for future growth.
See More
Software Companies Face AI Disruption
- Market Reaction Analysis: Following the launch of Anthropic's Claude Cowork, software companies like Shopify, Monday.com, and Fastly saw stock declines of 23%, 15%, and 16% respectively, indicating investor concerns over AI potentially replacing traditional software, which may lead to a reevaluation of investment strategies.
- Industry Trend Observation: Despite surging AI spending and major players like Meta and Alphabet pushing forward, the future of software companies remains uncertain, particularly for those reliant on single-function products, which may face greater risks of obsolescence.
- Job Market Dynamics: Recent data shows that January layoffs reached the highest level since 2009, with job openings falling to the lowest since 2020, reflecting adjustments in labor demand as companies navigate economic recovery, potentially linked to the rise of AI technologies.
- Investment Strategy Adjustment: Analysts recommend focusing on mission-critical software companies like CrowdStrike and Toast, which may remain stable amid the AI wave due to their essential business functions, urging investors to be selective in navigating market volatility.
See More
Discussion on Potential Merger Between SpaceX and xAI
- Merger Prospects: The potential merger between SpaceX and xAI has garnered market attention, particularly with SpaceX's anticipated IPO in 2026, as this merger could attract investor interest and enhance the IPO's appeal.
- Capital Market Competition: Currently, companies like OpenAI and Anthropic are also vying for entry into the capital markets, highlighting the fierce competition among large capital-intensive firms for IPOs, and the merger of SpaceX and xAI could enhance their market attractiveness in this context.
- Investor Confidence: Although the market remains cautious about mergers involving Elon Musk's companies, analysts believe that such a merger could provide these firms with greater resource and capital liquidity, helping them achieve better valuations ahead of their IPOs.
- Technological Integration Potential: If SpaceX and xAI successfully merge, it could create a powerful technological ecosystem that leverages AI to enhance innovation in aerospace and transportation, thereby gaining a competitive edge in future market dynamics.
See More
Software Companies Face AI Disruption
- Significant Market Reaction: Following Anthropic's launch of Claude Cowork, software companies like Shopify, Monday.com, and Fastly saw stock declines of 23%, 15%, and 15% respectively, indicating investor concerns over AI potentially replacing traditional software, which could lead to a reevaluation of these companies' long-term value.
- Surge in AI Spending: While AI spending continues to rise, software companies are facing intensified competitive pressures, particularly those reliant on single-function offerings like HubSpot and Atlassian, which may experience greater market disruption, impacting their future profitability.
- Clear Industry Differentiation: Analysts categorize software companies into three groups: large software leaders like Microsoft, critical ecosystem companies like Shopify, and those with singular functions, with the latter facing higher risks in the wake of AI advancements, potentially leading to market share erosion.
- Job Market Fluctuations: Recent data shows that layoffs in January 2026 reached the highest level since 2009, and while the overall unemployment rate remains within historical averages, this trend may reflect companies adjusting their hiring strategies in light of AI investments and efficiency improvements, affecting future recruitment plans.
See More
