Key Stats for Toast Stock
- Past week’s performance: consolidating
- 52-week range: $24 to $50
- Valuation model target price: $40
- Implied upside: 39.0% over 2.7 years
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What Happened?
Toast (TOST) rebounded this week, but the bigger story is still resetting expectations. The stock closed near $29 after falling well below its 52-week high of $50. Investors are weighing strong restaurant adoption against softer sentiment around payments growth and EBITDA guidance.
Toast’s February results showed that the business is still expanding. The company added a record 30,000 net locations in 2025, reaching about 164,000 total locations. ARR, or annualized recurring run-rate revenue, rose 26% to more than $2.0 billion.
Management framed the year as a proof point for scale. CEO Aman Narang said, “2025 was a strong year for Toast,” citing location growth, recurring gross profit growth, and 34% adjusted EBITDA margins. That helped support the long-term story, even as shares remained sensitive to near-term guidance.
The past few weeks also brought new enterprise and platform headlines. Toast partnered with Alicart Restaurant Group across high-volume brands like Carmine’s, Virgil’s Real BBQ, and Mermaid Oyster Bar. It also expanded through an Instacart partnership that links restaurants and retailers to inventory, marketplace, and procurement tools.
Going forward, the stock’s setup depends on whether Toast can turn restaurant adoption into durable profit growth without slowing payments and software momentum.
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Is Toast Stock Undervalued?
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 18.1%
- Operating Margins: 9.2%
- Exit P/E Multiple: 22.5x
Based on these inputs, the model estimates a target price of $40.37, implying 39.0% total upside from the current share price and a 13.0% annualized return over the next 2.7 years.
That return profile looks attractive, but it is not without execution risk. Toast trades at 22.5x forward earnings and 2.1x forward revenue. The stock’s valuation depends on revenue growth staying high while margins keep expanding.
The business has improved sharply. Revenue rose 24.1% in 2025 to $6.2 billion, while operating margin improved to 5.0%. Free cash flow also reached $608 million, giving Toast more flexibility to invest and repurchase shares.
Toast competes with Square, Shift4, and restaurant-focused software providers. Its moat comes from being deeply embedded in restaurant workflows, including point-of-sale, payments, payroll, ordering, loyalty, and back-office tools. The risk is that payment competition can pressure take rates if restaurants push for lower costs.
What’s Driving TOST Stock Going Forward?
The next major catalyst is Q1 2026 earnings on May 7. Toast guided for Q1 non-GAAP subscription services and fintech gross profit of $505 million to $515 million. It also guided for an adjusted EBITDA of $160 million to $170 million.
Investors will focus on whether location growth remains strong. More locations create more payment volume, software revenue, and cross-sell opportunities. That matters because Toast’s model works best when restaurants use multiple products.
Enterprise adoption is another driver. Alicart’s rollout matters because high-volume restaurants test whether Toast can serve complex operators at scale. If large chains adopt more products, Toast can grow revenue without relying only on small independent restaurants.
AI tools could also support expansion. Toast IQ is the company’s AI assistant, and it helps operators analyze menus, pricing, inventory, and sales trends. If AI improves restaurant decision-making, it could make Toast’s platform harder to replace.
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Should You Invest in Toast?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up TOST, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track TOST alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
