Latest news with #ToastIQ
Forbes
08-08-2025
- Business
- Forbes
Block Stock or Toast Stock?
Question: Why would you pay 2x revenues for Block stock (NYSE:XYZ) – when you can purchase Toast stock (NYSE:TOST), a cloud-based platform for restaurant management, at 5x? You wouldn't, particularly when three significant factors—growth, profitability, and financial standing—indicate that Toast has a more robust financial base and a brighter future. Is Toast A Reliable Investment? While Toast may not be a conventional 'safe haven' investment, evaluating its historical performance during market disruptions is crucial. For instance, Toast's stock suffered substantial drops of 80% during the inflation shock of 2022 and has yet to regain its pre-crisis levels. This indicates that it is not exempt from market fluctuations. Nonetheless, the potential for long-term growth driven by AI makes Toast a compelling investment, particularly in light of its recent achievements. The firm generated $1.9 billion in Annual Recurring Revenue (ARR) and experienced a 35% year-over-year increase in recurring gross profit in the most recent quarter. AI-Driven Solutions and Market Position Although many businesses provide point-of-sale solutions, Toast differentiates itself with its AI-driven advancements such as ToastIQ and Toast Now AI. These technologies utilize Toast's distinct restaurant data to deliver crucial insights to its clients. The combination of advanced AI and a comprehensive restaurant management platform positions Toast as a frontrunner in the restaurant technology AI sector. Future Growth and Revenue Toast's solid market position is reinforced by its extensive customer base. The company could scale up to 200,000 locations by 2026, up from the current 148,000. The complete rollout of 'Toast Now AI' is anticipated to boost average revenue per user, further enhancing growth within the expanding foodservice technology sector. The company's top line is projected to expand at a 20% average annual rate over the next few years. Additionally, see – The Trade Desk: Buy TTD Stock Now At $65? What Are the Potential Risks? Several significant risks could impact Toast's growth and investment attractiveness. The company operates in a volatile sector and encounters considerable threats from fierce competition and economic instability. Toast faces strong competition from established point-of-sale (POS) players and newcomers like DoorDash, which is venturing into the POS space. This could threaten Toast's collaborations and customer relationships. Furthermore, the company's dependency on the restaurant sector renders it highly susceptible to economic downturns. In the event of an economic slump, for instance, restaurant revenues typically decline, which would directly diminish technology spending and consequently, Toast's revenue. Operational hazards include the risk of security breaches and deteriorating profit margins due to rising competition. The company also contends with challenges in its international expansion efforts, where local rivals are already well-entrenched. The high turnover rate and frequent closures in the restaurant industry mean Toast must continually attract new customers just to sustain its growth. Additionally, macroeconomic variables like inflation could dampen both consumer spending and business investment in new technology, adding further pressure on the company. Overall, despite TOST stock being currently pricier than XYZ stock, it appears to be the more appealing investment option. However, investors should meticulously assess the associated risks before concluding. Note that there always exists a significant risk when investing in a single stock or a limited number of shares. Consider Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has demonstrated a history of comfortably outperforming the S&P 500 over the previous 4-year is that? As a collective, HQ Portfolio stocks delivered superior returns with reduced risk compared to the benchmark index; less of a turbulent experience, as demonstrated in HQ Portfolio performance metrics.
Yahoo
01-08-2025
- Business
- Yahoo
Truist Lifts Toast (TOST) PT to $50 from $48, Remains Optimistic for FinTech Sector
Toast Inc. (NYSE:TOST) is one of the best growth stocks to buy and hold for 3 years. On July 22, Truist raised its price target for Toast to $50 from $48, while keeping a Buy rating on the shares. The firm is optimistic for the FinTech sector and expects solid overall earnings results while noting the group's recent underperformance. In Q1 2025, Toast reported booking Applebee's, which marked its largest deal in company history, and added 6,000+ net new locations during the quarter. In that quarter, the Annualized Recurring Run-rate grew 31% year-over-year to $1.7 billion. Toast achieved a net income of $56 million and Adjusted EBITDA of $133 million. A consumer smiling and receiving a cash back rebate they earned from engaging with digital media. In Q1, the company experienced a 25% year-over-year increase in total locations, which reached ~140,000. Gross Payment Volume/GPV rose 22% year-over-year to $42.2 billion. In this quarter, Toast also renewed its credit facility, closing a $350 million revolving credit facility, which amends and restates its previous $330 million facility established in 2021. The company also introduced ToastIQ, an intelligence engine designed to enhance restaurant operations. Toast Inc. (NYSE:TOST) is a cloud-based digital technology platform for the restaurant industry in the US, Ireland, India, and internationally. While we acknowledge the potential of TOST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the . READ NEXT: and . Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
16-07-2025
- Business
- Yahoo
Toast Stock Up 22% YTD: Does the Rally Have More Room to Run?
Toast, Inc.'s TOST shares have gained 21.6% year to date, outperforming the Internet Software market and the Zacks Computer & Technology sector's growth of 14.6% and 8.4%, respectively. The S&P 500 composite has returned 5.6% over the same time frame. The company is one of the leading providers of software-as-a-service (SaaS) and hardware solutions focused on the restaurant market. Price Performance Image Source: Zacks Investment Research TOST was down 0.3% last day and closed the session at $44.34, close to its 52-week high of $46.57. While the recent momentum may seem encouraging, let us take a closer look at the company's pros and cons to ascertain whether investors hold the stock or exit the investment. What Is Working in Favor of TOST Toast is expanding its presence in the core U.S. SMB restaurant market. Wins like Applebee's and Topgolf reflect that its momentum is strong. TOST has only 10% penetration into its 1.4 million location TAM, thereby offering a substantial long-term expansion opportunity. Toast's investments in AI-powered tools like Sous Chef and ToastIQ bode well. Apart from this, the company is making progress in three new growth vectors: enterprise, international and food & beverage retail. It has set a target to cross 10,000 locations by the end of 2025 across these three new growth areas. To boost its international footprint, Toast has added loyalty, e-mail marketing and guest book to product offerings and consequently managed to double guest attach rate over the past year for the most recent locations that went live. TOST registered more than 6,000 net locations in the first quarter of 2025. It ended with approximately 140,000 total customer locations globally at quarter-end, reflecting 25% year-over-year growth. Management expects to post record net adds in the current quarter and 2025 is now expected to top 2024's full-year net additions. Toast, Inc. Price, Consensus and EPS Surprise Toast, Inc. price-consensus-eps-surprise-chart | Toast, Inc. Quote Toast achieved an adjusted EBITDA margin of 32%, within its medium-term target of 30-35% well ahead of schedule. The company attributed the strong profitability to disciplined expense management. Excluding bad-debt charges and credit-related expenses, operating costs rose only around 12%, mainly due to increased spending on sales and marketing to hire representatives and amplify brand efforts. Research and development, and general and administrative expenses remained mostly flat. Management emphasized that this disciplined approach is fueling healthy top-line growth while investing only in areas with high return on investment. Free cash flow turned positive. The figure was $69 million against a $33 million loss a year ago. Driven by these developments, Toast now projects 26% growth in fintech and subscription gross profit for 2025 at the midpoint, while adjusted EBITDA is now estimated at $550 million, with a 31% margin, an increase of five percentage points from 2024. Given this, analysts have revised earnings estimates upwards for the current quarter and the current year. Image Source: Zacks Investment Research Challenges Loom Large for TOST Management highlighted that it was closely monitoring the macro environment and emphasized restaurants' ability to navigate macro challenges. Despite Toast's confidence, the restaurant industry is still highly sensitive to consumer spending, labor inflation and supply-chain volatility. A consumer downturn or cost pressures could reduce restaurant spend on technology, thereby impacting TOST's performance. Decline in Gross Payment Volume ('GPV') per location is another problem, as it implies lower average transaction volumes. TOST's overall GPV surged 22% year over year to $42 billion in the first quarter. However, GPV per location declined 3% year over year. TOST added that it expects GPV per location to remain down in a similar range in the current quarter. Higher costs and competitive pressure from various small and big players who are also vying for a larger share of this lucrative market are other headwinds. Subscription revenues were up 38%, driven by improved ARR to revenue conversion. The company expects subscription revenue growth to 'return to more normalized levels' in the latter half of 2025. Stretched Valuation for TOST TOST stock is also not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment. Image Source: Zacks Investment Research Toast is quite expensive, with the stock trading at a premium with a price/book multiple of 13.20X compared with the industry's 6.57X. Final Word: Hold TOST Stock for Now Despite some headwinds, Toast's focus on expanding addressable market and strategic investments in AI supports long-term upside. The company's improving profitability, robust customer additions and raised outlook reflect operational strength. TOST currently carries a Zacks Rank #3 (Hold). Long-term investors should continue holding their positions. However, new entrants may benefit from waiting for a more favorable entry point, as the current valuation indicates the optimism is already largely priced in. Stocks to Consider Some better-ranked stocks within the Internet software space are Affirm Holdings, Inc. AFRM, Bumble Inc. BMBL and HubSpot, Inc. HUBS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for AFRM's fiscal 2026 EPS is pegged at 74 cents, improved by 4 cents in the past seven days. AFRM's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 102.2%. The stock has gained 104.9% in the past year. The Zacks Consensus Estimate for BMBL's 2025 earnings per share is pegged at $1.05, improved by 1 cent in the past seven days. Bumble's earnings missed the Zacks Consensus Estimate in the last reported quarter by 18.8%. Its shares have lost 29.5% in the past year. The Zacks Consensus Estimate for HUBS' 2025 EPS is pegged at $9.34, unchanged in the past seven days. HubSpot's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 10.65%. The stock has risen 10.1% in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HubSpot, Inc. (HUBS) : Free Stock Analysis Report Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report Bumble Inc. (BMBL) : Free Stock Analysis Report Toast, Inc. (TOST) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
26-06-2025
- Business
- Yahoo
Can Toast Keep EBITDA Margins Above 30% With Cost Discipline?
Toast, Inc. TOST posted a standout first-quarter 2025, with revenue rising 24.4% year over year to $1.34 billion and adjusted EBITDA reaching $133 million, with about a 32% margin. This significant margin improvement stems from solid gross-profit growth and strict cost discipline, prompting investors to wonder whether Toast can maintain margins exceeding 30% as it continues to scale. Management attributed the strong profitability to disciplined expense management. Excluding bad-debt charges and credit-related expenses, operating costs rose only around 12%, mainly due to increased spending on sales and marketing to hire representatives and amplify brand efforts. Research and development and general and administrative expenses remained mostly flat. The company emphasized that this disciplined approach is fueling healthy top-line growth while investing only in areas with high return on investment. Free cash flow turned positive—$69 million against a $33 million loss a year ago. Meanwhile, Toast's platform expansion is underway. Annual recurring revenues reached $1.7 billion, a 31% year-over-year rise, while the platform now operates in approximately 140,000 locations, reflecting 25% year-over-year growth. It reported more than 6,000 net locations in the first quarter. Management expects to post record net adds in the current quarter, and 2025 is now expected to top 2024's full-year net additions. TOST has only 10% penetration into its 1.4 million location TAM, thereby offering a substantial long-term expansion opportunity. The company is leveraging this scale to roll out new services, including its AI-powered analytics engine, ToastIQ, and broader fintech products that add revenues without proportionate cost increases. The addition of a $350 million revolving credit facility gives the company further flexibility to pursue growth aggressively. Driven by these developments, Toast raised its full-year outlook to around $550 million in EBITDA, with a 31% margin, an increase of five points from 2024 (the prior view was $510-$530 million at a 30% margin). It now expects 25-27% growth in fintech and subscription gross profit, up from the prior 23-25% range. Toast remains on track for strong growth and rising profitability while continuing to invest in key long-term priorities. However, management highlighted that it was closely monitoring the macro environment and emphasized restaurants' ability to navigate the challenges. Although Toast remains confident, the restaurant industry remains highly vulnerable to shifts in consumer spending, rising labor costs and supply chain disruptions. Any downturn in consumer demand or increase in operating costs could lead restaurants to cut back on technology investments, which will negatively impact TOST's performance. Block XYZ, formerly known as Square, offers financial and marketing services through its comprehensive commerce ecosystem, which helps sellers start, run and grow their businesses. Block's Square for Restaurants POS platform competes directly with TOST's offerings. In the first quarter of 2025, adjusted EBITDA was $812.8 million, up 15.3% year over year. The adjusted operating income was $466.3 million in the reported quarter, with an operating margin of 8.1%, expanding 200 basis points on a year-over-year basis. For the second quarter of 2025, Block expects gross profit of $2.45 billion, suggesting year-over-year growth of 9.5%. Adjusted operating income is expected to be $450 million with an operating margin of 18%. For 2025, XYZ expects a gross profit of $9.96 billion, indicating growth of 12% from the 2024 reported figure. Adjusted operating income is now expected to be $1.9 billion, with an operating margin of 19%. Lightspeed Commerce LSPD, a Montreal-based cloud commerce platform that serves both retail and restaurant sectors, recorded a strong financial turnaround in the fourth quarter of fiscal 2025. The company reported total revenues of $253.4 million, marking a 10% year-over-year increase, and achieved adjusted EBITDA of $12.9 million, up from $4.4 million in the same quarter last year. For the full fiscal year, Lightspeed posted $1.08 billion in revenues, an 18% jump over the previous year, and $53.7 million in adjusted EBITDA, reversing a $1.3 million loss in fiscal 2024. Gross margins improved to 44%, while subscription gross margins rose to 81%, supported by cost optimization and price adjustments. For fiscal 2026, the company expects continued profitability, with full-year adjusted EBITDA guidance of between $68 million and $72 million and projected revenue growth of 10–12%. For the first quarter of 2026, Lightspeed forecasts gross profit growth of around 13% and adjusted EBITDA of $14-$16 million. Shares of TOST have gained 61.4% in the past year compared with the Zacks Internet-Software industry's growth of 34.3%. Image Source: Zacks Investment Research From a valuation standpoint, TOST trades at a forward price-to-sales of 3.12X, lower than the industry's average of 5.76X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for TOST's earnings for 2025 has been on the rise over the past 60 days. Image Source: Zacks Investment Research TOST currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lightspeed Commerce Inc. (LSPD) : Free Stock Analysis Report Toast, Inc. (TOST) : Free Stock Analysis Report Block, Inc. (XYZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
Toast (NYSE:TOST) Reports Q1 2025 Revenue Surge to US$1,337 Million
Toast has recently experienced an 18% increase in its share price over the last month, coinciding with notable corporate developments. The company announced a robust Q1 2025 earnings growth, with revenue rising to $1,337 million and net income improving from a loss to $56 million. Additionally, partnerships with Topgolf and Dine Brands underscore its expanding enterprise footprint, likely reinforcing investor confidence. The introduction of ToastIQ, a new intelligence engine, indicates a commitment to service enhancement and operational efficiency. While the market stayed flat over the past week, these events contributed positively to Toast's share price movement. Every company has risks, and we've spotted 1 risk for Toast you should know about. Find companies with promising cash flow potential yet trading below their fair value. Recent developments at Toast could significantly influence its growth narrative, primarily through partnerships with Topgolf and Dine Brands and the introduction of ToastIQ. These actions highlight the company's focus on enhancing customer experience and operational efficiency. They also align with its strategy of expanding geographically and into new customer segments. Over the past three years, Toast shares have exhibited a substantial total return of 172.45%, reflecting its successful shift to profitability and expansion beyond the U.S. restaurant market. In contrast, within the last year, Toast's performance has surpassed the US Market's return of 8%, showcasing noteworthy momentum in comparison. The recent announcements are likely to support revenue growth forecasts, currently projected at 15.4% per year, according to analysts. With a focus on R&D and market expansion, Toast aims to strengthen its gross margins and earnings, predicted to reach US$617.2 million by May 2028. However, achieving the consensus price target of US$41.03, an 11.8% increase from the current share price of US$36.21, requires meeting specific financial growth metrics and margin improvements. Investors should consider the potential risks and rewards based on these ambitious growth forecasts and market conditions. Unlock comprehensive insights into our analysis of Toast stock in this financial health report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:TOST. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
