Toast

TOST

Market cap $20.5B

Recently, Zacks.com users have been paying close attention to Toast (TOST). This makes it worthwhile to examine what the stock has in store.

BOSTON--(BUSINESS WIRE)--Toast Delivers Precision Insights, Action, and Efficiency for Retailers.

In the closing of the recent trading day, Toast (TOST) stood at $36.66, denoting a +1.64% move from the preceding trading day.

Toast, Inc. (TOST) has rapidly captured market share in restaurant POS and SaaS, leveraging super, prior product quality and flexibility. Despite many SaaS competitors, TOST's scale within its core customer base creates switching costs that gives it a narrow economic moat. A Q2 earnings miss (adjusted eps of $0.13 vs $0.22e) pressured shares, but solid Q3 results have stabilized the stock.

Alphabet has a big AI growth opportunity. Toast is seeing strong revenue growth and starting to expand into adjacent markets.

The latest trading day saw Toast (TOST) settling at $35.51, representing a -2.15% change from its previous close.

Toast is rapidly transforming into a high-margin, software-first business, driving recurring cash flows and enhanced pricing power. TOST's enterprise and international expansion, including deals with Nordstrom, Everbowl, and Uber, strengthens its moat and reduces customer churn. With 25.75% revenue growth, $1.8B in cash, and $574.5M in free cash flow, TOST is self-funding aggressive expansion and outpacing legacy peers.

Toast has a sticky business model that resonates with its restaurant customers. Chipotle is dealing with some short-term struggles but the core business is strong.

Toast delivered two earnings beats in a row, showing solid resilience despite all the macro noise around restaurants, and started to really show its operating leverage. Fintech revenue is re-accelerating on a higher take rate (helped by Toast Capital and better underwriting), SaaS revenue per location keeps growing nicely, and same-store trends for Toast's customers remain. The long-term growth engines are still there: international expansion and moving further upmarket into small and mid-sized multi-location chains, with early wins already visible.

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?