Analysts have slightly reduced their fair value price target for Toast to $49.71 from $50.54. They cite recent shifts in starter kit software pricing and ongoing competitive dynamics in the restaurant technology sector as reasons for the change.
Analyst Commentary
Analysts remain divided in their outlook on Toast, with several firms adjusting their price targets and ratings based on recent performance, strategic moves, and competitive pressures. Below is a summary of key bullish and bearish takeaways from recent research commentary.
Bullish Takeaways- Several bullish analysts have raised their price targets, reflecting confidence in Toast’s ability to capture notable enterprise wins, including partnerships with large national restaurant chains.
- Analysts believe the company is well positioned to outperform, noting strong consumer spending trends and robust execution of its growth initiatives.
- Expectations are building for Toast to deliver quarterly results that not only meet but potentially exceed consensus estimates. There is also the possibility of upward revisions to financial guidance for 2025.
- The broader fintech sector, of which Toast is a part, is viewed favorably by some, especially given recent industry underperformance and the potential for a rebound in sentiment.
- Bearish analysts remain cautious due to recent fluctuations in starter kit software pricing and signs of increasing competition, which could pressure near-term profitability.
- Some note that pricing changes, which initially looked like significant cuts, appeared to revert back or even increase. This creates uncertainty around Toast’s pricing strategy and its effects on new customer growth.
- There are ongoing concerns about macroeconomic headwinds, such as trade uncertainty and variability in consumer spending, which may weigh on projected growth and margin stability.
- Several analysts maintain neutral ratings in spite of the long-term thesis, reflecting a view that current valuation is fair given both the company’s prospects and the risks associated with evolving market dynamics.
What's in the News
- Toast and American Express have entered a multi-year strategic partnership to deliver personalized hospitality tools and seamless dining experiences across the Resy, Tock, and Toast networks. Product features are expected to begin rolling out in 2026 (Key Developments).
- The company launched Toast Go 3, a next-generation handheld POS device designed for hospitality environments. The device features ToastIQ intelligence, built-in cellular connectivity, and an IP65-rated durable design (Key Developments).
- Toast announced a partnership with Sparket, enabling the integration of its multiplayer real-money gaming platform, 21 Hustle, Gin Rummy, and Pinfall into Sparket’s ecosystem. This expands Toast’s B2B gaming portfolio (Key Developments).
- Adentro has joined the Toast Partner Ecosystem, providing SKU-level marketing attribution. This enables restaurants to directly link digital advertising campaigns to specific menu item purchases within the Toast POS platform (Key Developments).
- Between April and June 2025, Toast completed a share repurchase of 409,000 shares, bringing its total buybacks under its February 2024 program to 3,295,000 shares, with a total spend of $86.63 million (Key Developments).
Valuation Changes
- Fair Value: The fair value estimate decreased slightly from $50.54 to $49.71 per share.
- Discount Rate: The discount rate edged down marginally from 7.45% to 7.36%.
- Revenue Growth: Projected revenue growth softened minimally, moving from 17.34% to 17.30%.
- Net Profit Margin: Net profit margin rose fractionally from 8.27% to 8.28%.
- Future P/E: The estimated future price-to-earnings ratio declined from 53.49x to 52.47x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.