Assessing Toast’s (TOST) Valuation After Securing TGI Fridays and everbowl Partnerships

Toast (TOST) just scored new partnerships with TGI Fridays and everbowl to roll out its restaurant technology platform across hundreds of locations nationwide. These fresh deals are worth digging into for anyone tracking Toast's enterprise reach.

See our latest analysis for Toast.

These major wins for Toast have come as the stock has seen some ups and downs. While Toast just secured serious momentum with TGI Fridays and everbowl, the 1-year total shareholder return is down 21.05%. However, looking back over three years, total shareholders have seen an impressive gain of nearly 89%. This shows that big-picture growth potential is still in play even if near-term sentiment has cooled.

If these new partnerships have you thinking bigger, it could be a perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With these headline partnerships and a solid track record of revenue and net income growth, the question remains: is Toast trading at a discount to its true value, or is future growth already reflected in its price?

Most Popular Narrative: 28% Undervalued

The latest narrative sets Toast’s fair value well above its last close, showing a meaningful gap between analyst expectations and the stock’s current price. This difference spotlights investor optimism about Toast’s long-term prospects and sets up a critical look at the underlying assumptions shaping this target.

Long-term challenges with labor shortages and wage pressures in hospitality drive restaurants to seek automation and operational efficiency. This increases demand for Toast's AI-driven tools (such as ToastIQ and Sous Chef) and productivity-enhancing hardware (Toast Go 3), which should support sustained revenue growth and improve net margins.

Read the complete narrative.

What’s really fueling this bold valuation? There’s a financial catalyst in play: ambitious growth targets, margin expansion hopes, and an earnings leap forecasted over a tight timeline. Curious how these aggressive projections stack up and what kind of profit multiples narrators are betting on? Dive in to see what makes this narrative tick and whether the market is buying it.

Result: Fair Value of $47.35 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained high marketing costs or intensifying competition could undermine Toast’s profit growth. This would challenge the idea that future earnings justify recent optimism.

Find out about the key risks to this Toast narrative.

Another View: Looking at Valuation Multiples

While the narrative suggests Toast is undervalued, a closer look at its price-to-earnings ratio tells a different story. Toast trades at 73.1 times earnings, which is far higher than the US industry average of 13.2x and peer average of 36.7x. Compared to a fair ratio of 22.8x, this premium signals significant valuation risk if growth fails to deliver. With such a gap, how much should investors trust the optimistic narrative?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Toast Narrative

If you see things differently or want to dig deeper yourself, it’s quick and easy to build your own story from the latest data. Just Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Toast.

Looking for More Investment Ideas?

You already see what’s possible with Toast, but don’t let your search stop here. The smartest investors always keep tabs on tomorrow’s winners. Don’t miss out on the next breakout stock or emerging theme making headlines right now.

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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.

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