The average analyst price target for Toast has been revised slightly lower, decreasing by $0.79 to $48.92. Analysts are factoring in moderated profit margin expectations along with ongoing growth opportunities highlighted in recent research.
Analyst Commentary
Analysts have provided a range of perspectives on Toast's outlook, reflecting both optimism over several growth factors and caution regarding near-term challenges and valuation.
Bullish Takeaways
- Bullish analysts see Toast continuing to gain incremental share in the U.S. restaurant market by leveraging its modern, cloud-based platform and purpose-built solutions for the industry.
- Expansion into new business segments, such as enterprise customers, food and beverage retail, and international markets, is viewed as a significant opportunity to grow the company’s total addressable market and drive sustained performance in key metrics.
- Recent wins with major franchise groups, including multi-location chains, highlight strong execution and provide evidence of Toast’s momentum in both securing and expanding large enterprise relationships.
- Some analysts have raised price targets based on the company surpassing high expectations in quarterly results and affirming or modestly increasing future financial guidance ranges. This signals ongoing confidence in Toast's execution and growth prospects.
Bearish Takeaways
- Bearish analysts point to recent downward adjustments in price targets as a result of model updates following earnings previews. Valuation concerns are cited amid moderated profit margin expectations.
- Pricing in the core starter kit software segment has seen fluctuations, with some reductions implemented and then mostly reversed. This fuels industry concerns over competitive pressure and the sustainability of current pricing strategies.
- The company’s neutral ratings from several analysts reflect a wait-and-see approach. While growth prospects remain, there is caution regarding near-term profitability and market conditions.
- Despite strong enterprise wins, Toast’s performance following broader FinTech sector underperformance remains an area for close observation, particularly in the context of earnings volatility and shifting investor sentiment.
What's in the News
- Toast and American Express announced a multi-year collaboration to create more personalized hospitality experiences in the restaurant industry. This partnership will integrate Resy and Tock guestbook capabilities with Toast's Digital Chits technology for enhanced guest insights, with new features set to begin rolling out in 2026. (Strategic Alliances)
- Toast launched the Toast Go® 3, its newest handheld point-of-sale device. The device offers improved speed, durability, and ToastIQ-powered features such as Menu Upsells and Shift at a Glance to help restaurant teams operate efficiently anywhere, from patios to curbside. (Product-Related Announcements)
- The company formed a partnership with Sparket, introducing Toast's multiplayer gaming platform and skill-based real-money games, such as 21 Hustle, Gin Rummy, and Pinfall, to Sparket's user base and partners. This signals the company's expansion into real-time mobile gaming. (Client Announcements)
- Toast completed a share buyback tranche between April and June 2025, repurchasing 409,000 shares for $13.22 million. This brings the total to 3,295,000 shares or $86.63 million since February 2024. (Buyback Tranche Update)
- Adentro joined the Toast Partner Ecosystem, integrating SKU-level marketing attribution into the Toast POS platform. This enables restaurants to directly connect digital advertising campaigns to individual menu item purchases and improve marketing ROI. (Client Announcements)
Valuation Changes
- Consensus Analyst Price Target has edged lower, declining from $49.71 to $48.92.
- Discount Rate has decreased marginally from 7.36% to 7.35%.
- Revenue Growth expectations have increased, rising from 17.30% to 17.74%.
- Net Profit Margin projections have fallen slightly, moving from 8.28% to 8.02%.
- Future P/E Ratio is now somewhat higher, increasing from 52.47x to 52.71x.
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.