Toast (TOST) Stock Forecast & Price Target

Toast, a restaurant technology company, reported a 28% year-over-year growth in Financial Technology Solutions revenue, totaling $1,090 million, and is expected to gain an additional 2-2.5% market share annually through 2027. The firm experienced a substantial increase in recurring gross profit, rising to $392 million from $281 million the previous year, coupled with a 41% year-over-year growth in subscription revenue, reaching $200 million. Additionally, the company’s successful expansion in its core US market is evidenced by the addition of 7,000 new locations in the fourth quarter and positive trends in the restaurant sector, with same-store sales and traffic increasing by 2.8% and 0.9%, respectively, according to Black Box Intelligence.

The analysis indicates a declining trend in gross platform volume (GPV) per location for Toast, which decreased quarter-over-quarter to $319,000, and reflects potential stagnation in growth as it remained flat year-over-year. Operating income, while showing improvements from a prior loss, was slightly down from the previous quarter, highlighting challenges in achieving profitability amidst ongoing investments in growth. Moreover, the forecasts for the next two years suggest relative stagnation in hardware and professional services revenue, alongside anticipated declines in gross profit, raising concerns about Toast's ability to sustain its growth trajectory in a potentially adverse economic environment.