Toast (TOST): Exploring Valuation as 2025 Restaurant Survey Sparks Debate on AI, Efficiency, and Earnings Outlook

Toast (NYSE:TOST) is drawing attention this week after its 2025 restaurant industry survey revealed trends related to artificial intelligence, efficiency, and profitability. Investors are watching closely as the company prepares for its upcoming earnings announcement.

See our latest analysis for Toast.

After a strong run over the past year, Toast shares have hit some turbulence recently, shedding over 21% in the past three months even as its one-year total shareholder return stands at a robust 23%. This mix of long-term gains and recent pullback reflects shifting sentiment around the company as investors remain intrigued by Toast’s innovation and longer-term growth track record, but are recalibrating short-term expectations as new risks and opportunities emerge.

If Toast’s journey has you rethinking your watchlist, consider it a signal to discover fast growing stocks with high insider ownership.

With shares recently dipping but future profit forecasts looking strong, investors are left to wonder if Toast is currently undervalued and presenting a timely buying opportunity, or if the market is already pricing in its expected growth.

Most Popular Narrative: 29.6% Undervalued

The most widely watched narrative values Toast well above its last close, signaling a sizeable upside according to analyst consensus. This stark valuation gap raises the stakes as the market awaits the company’s next moves.

The rapid adoption of integrated digital payment and ordering solutions, including mobile and contactless experiences, continues to expand Toast's addressable market. This positions the company to capture increased transaction volume and higher recurring fintech and software revenues as restaurants upgrade from legacy systems.

Read the complete narrative.

Want to pull back the curtain on this valuation? The fair value leans on projections for breakneck revenue growth and a transformation in profit margins few companies ever achieve. What bold assumptions help bridge the gap between present price and future forecast? Click through and see what’s driving the optimism behind this call.

Result: Fair Value of $49.71 (UNDERVALUED)

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

Still, increasing competition and fluctuating pricing could disrupt Toast’s momentum. These factors may put pressure on margins despite the company’s strong growth story to date.

Find out about the key risks to this Toast narrative.

Another View: What Do Price Ratios Say?

Looking at Toast’s price-to-earnings ratio, there is a very different story. Shares trade at 91x earnings, much higher than both the sector average of 15.7x and similar peers at 18x. Even compared to a fair ratio of 23.1x, Toast looks expensive by this measure. Does this stark premium signal hidden potential, or does it suggest investors face more risk than reward ahead?

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

Build Your Own Toast Narrative

If you see the numbers differently or want to dig deeper before deciding, you can shape your own view and narrative in just a few minutes. Do it your way.

A great starting point for your Toast research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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