Toast, Inc. (TOST) AI Stock Analysis
TOST AI stock analysis summary
AI ResearchToast, Inc. provides cloud-based digital technology and payment solutions specifically built for the restaurant industry. The company grew annual revenue from $1.71B in FY2021 to $6.15B in FY2025, reaching net income of $342.0M. Over the trailing twelve months, revenue reached $6.80B with an operating margin of 7.4%.
- Market cap
- $18.28B
- Revenue (TTM)
- $6.80B
- P/E
- 40.0x fwd 17.6x
- 1Y return
- -15.5% S&P 500 16.8%
- Avg. target
- $38.85 22.9% vs last close
Bull case
- Toast generated $608.0M in free cash flow and $661.0M in operating cash flow in FY2025, up from negative figures three years prior.
- Quarterly revenue grew 23.1% year-over-year in the quarter ended June 30, 2026, well above the 11.6% median for US-listed Technology peers.
- Wall Street analysts maintain a mean price target of $38.85, implying 22.9% upside from the stock's last close of $31.62.
Bear case
- The stock has lagged broader markets, falling 15.5% over the past year compared to a 16.8% gain for the S&P 500.
- Valuation remains elevated on certain metrics, with an EV/EBITDA of 31.8x versus the peer group median of 16.6x.
- Short interest represents 6.8% of the float, accompanied by higher volatility reflected in a beta of 1.74.
What Toast does
Toast, Inc. operates a cloud-based digital platform tailored for the restaurant industry in the United States and Ireland. Its product suite includes Toast Point of Sale hardware, Toast Order & Pay for mobile ordering and payment, Toast Flex on-counter terminals, and Toast Go handheld devices for tableside service. The company also offers kitchen display system software to connect front-of-house staff with kitchen operations, centralized management tools for multi-location restaurant chains, and digital solutions such as Toast Online Ordering, the Toast TakeOut app, and First-Party Delivery services.
Growth and profitability
Toast increased its revenue from $1.71B in FY2021 to $6.15B in FY2025, reflecting a 5-year revenue CAGR of 49.5% from FY2020 to FY2025. Gross margin expanded from 18.4% in FY2021 to 25.8% in FY2025. The company transitioned from a net loss of -$487.0M in FY2021 to positive net income of $19.0M in FY2024 and $342.0M in FY2025. In the latest quarter ended June 30, 2026, quarterly revenue grew 23.1% year-over-year, while quarterly earnings grew 100.0%. Trailing twelve month revenue stands at $6.80B, with a profit margin of 7.1% and diluted EPS of $0.79.
Balance sheet and cash flow
As of June 30, 2026, Toast held $1.71B in cash and short-term investments, with total assets of $3.18B and shareholders' equity of $2.04B. The company maintained a current ratio of 2.40. Cash generation improved significantly, with operating cash flow reaching $661.0M and free cash flow reaching $608.0M in FY2025. During FY2025, capital expenditures totaled $53.0M, and the company allocated $107.0M toward share buybacks. The company's share count increased 16.6% over the past 5 years.
Valuation and performance
Toast carries a market cap of $18.28B and an enterprise value of $15.48B. The stock trades at a trailing P/E of 40.0x, above the 28.1x median of its US-listed Technology peers, while its forward P/E of 17.6x sits below the peer median of 18.8x. Its EV/EBITDA multiple is 31.8x compared to the peer median of 16.6x, and its price-to-sales ratio is 2.7x versus 2.8x for peers. Over the past year, the stock fell 15.5%, trailing the S&P 500 return of 16.8%.
What analysts expect
Wall Street coverage includes 16 Strong Buy, 5 Buy, and 10 Hold ratings, with zero Sell or Strong Sell ratings. The mean price target is $38.85, representing a 22.9% upside over the last close of $31.62. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $7.47B and EPS of $1.40, implying 38.3% EPS growth. Toast beat EPS estimates in each of the last 4 quarters. The next earnings date is scheduled for November 3, 2026.
Key risks and what to watch
- Toast operates with high volatility as indicated by its beta of 1.74.
- The company's trailing operating margin of 7.4% remains below the US-listed Technology peer median of 13.2%.
- Share count expanded by 16.6% over a 5-year period, creating shareholder dilution despite $107.0M of share buybacks in FY2025.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this TOST AI stock analysis
This page is an AI-written research summary of Toast, Inc. (TOST). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: TOST income statement, TOST balance sheet, TOST key metrics, TOST analyst forecast, TOST chart. See the TOST stock overview for the latest quote and news.
TOST AI stock analysis FAQ
Does Toast pay a dividend?
No, Toast does not pay a dividend. In FY2025, the company deployed $107.0M toward share buybacks and $53.0M toward capital expenditures.
What are Toast's revenue and earnings expectations for FY2026?
Analysts estimate full-year FY2026 revenue of $7.47B and diluted EPS of $1.40, which represents expected EPS growth of 38.3%.
How strong is Toast's balance sheet?
As of June 30, 2026, Toast held $1.71B in cash and short-term investments, backed by shareholders' equity of $2.04B and a current ratio of 2.40.
When does Toast report earnings next?
Toast is scheduled to report its next earnings on November 3, 2026. The company has beaten EPS expectations in all of its last 4 quarters.