Toast, Inc. (TOST)

Price$33.95Cached quoteAs of 2026-09-06 08:45 UTC

AI: Overvalued

Price checkStrong growth is real, but the current valuation leaves little room for ordinary execution.

Using the latest verifiable quote, Toast trades at about 47 times trailing earnings and roughly 37 times trailing free cash flow. Free cash flow means cash left after running and investing in the business. After subtracting roughly $1.7 billion of June cash and marketable securities, the business is still valued near 34 times trailing free cash flow. That can work if recurring profit keeps growing above 20% and margins expand, but it provides a thin value-investor margin of safety, supporting an Overvalued verdict.

Big pictureToast has crossed into durable profitability while restaurant payment volumes still drive meaningful economic sensitivity.

Revenue rose from $4.96 billion in 2024 to $6.15 billion in 2025, while operating income improved from $16 million to $292 million and net income from $19 million to $342 million. The latest four reported quarters produced about $635 million of operating cash flow and $576 million of free cash flow. Cash generation is not perfectly smooth: first-half 2026 operating cash flow fell to $276 million from $302 million because inventory purchases increased. Restaurant spending also directly affects Toast's payment revenue, creating real cyclicality and seasonality.

Business strengthA debt-free balance sheet and rising recurring profits give Toast genuine financial staying power.

At June 2026, Toast held about $1.0 billion of cash plus $698 million of marketable securities, had no borrowings, and had another $347 million available on its credit line. Capital allocation is improving: Toast repurchased $486 million of shares during the first half while recording $109 million of stock-based compensation. The share count fell to about 577 million from 589 million at year-end. Dilution has not vanished, however: 18 million restricted stock units and 20 million options remained outstanding.

What could change the storyFaster margin gains could justify today's premium, while slower location growth would challenge it.

The strongest bull case is continued scale: second-quarter recurring gross profit grew 28%, locations rose 22% to about 180,000, and payment volume increased 22% to $60.7 billion. Management also raised full-year recurring gross-profit growth guidance to 23%-25%. If that pace lasts while costs rise more slowly, the high valuation becomes easier to justify. The bear case is growth falling toward the low teens before margins fully mature. Because payment economics depend on restaurant sales, weaker spending or fewer location additions could hurt both earnings growth and the valuation investors are willing to pay.

AI: News

Second-quarter outlook raisedToast raised its full-year outlook after strong second-quarter growth, but the immediate stock reaction was mixed.

On August 4, Toast reported $1.91 billion of quarterly revenue, $154 million of net income, 9,500 net new locations, and 25% growth in annualized recurring revenue to $2.4 billion. Management lifted 2026 recurring gross-profit growth guidance to 23%-25% and guidance for its adjusted profit measure to $805-$825 million. One market report showed shares down about 2% after hours. The timing suggests cautious expectations, but it does not prove the earnings release alone caused the move.

First-quarter earnings disappointmentFirst-quarter earnings missed expectations, and the stock fell sharply despite healthy revenue growth and higher guidance.

On May 7, Toast reported $1.63 billion of revenue, up 22%, and $126 million of net income while adding about 7,000 locations. Reported earnings per share fell short of the analyst consensus, and shares were reported down about 15.6% in May 8 morning trading. Management had nevertheless raised its full-year outlook. The reaction showed how much near-term execution investors were demanding; the timing supports an earnings-related explanation, although broader market forces may also have contributed.

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Revenue

2019

2020

2021

2022

2023

2024

2025

Net income

2019

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2022

2023

2024

2025

Free cash flow

2019

2020

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2025

Total cash / debt

CashTotal debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019
Revenue	$6.15B	$4.96B	$3.87B	$2.73B	$1.71B	$823.0M	$665.0M
Gross profit	$1.59B	$1.19B	$834.0M	$511.0M	$314.0M	$140.0M	$62.0M
Gross margin	25.89%	23.99%	21.58%	18.71%	18.42%	17.01%	9.32%
Research & development	$374.0M	$351.0M	$358.0M	$282.0M	$163.0M	$109.0M	$64.0M
Operating expenses	$1.30B	$1.17B	$1.12B	$895.0M	$542.0M	$360.0M	$275.0M
Operating income	$292.0M	$16.0M	−$287.0M	−$384.0M	−$228.0M	−$220.0M	−$213.0M
Operating margin	4.75%	0.32%	−7.43%	−14.06%	−13.37%	−26.73%	−32.03%
EBITDA	$356.0M	$62.0M	−$255.0M	−$360.0M	−$207.0M	−$193.0M	−$206.0M
EBITDA margin	5.79%	1.25%	−6.60%	−13.18%	−12.14%	−23.45%	−30.98%
Net income	$342.0M	$19.0M	−$246.0M	−$275.0M	−$487.0M	−$248.0M	−$209.0M
Net profit margin	5.56%	0.38%	−6.36%	−10.07%	−28.56%	−30.13%	−31.43%
Basic EPSper basic share	$0.59	$0.03	-$0.46	-$0.54	-$1.68	-$1.25	-$1.08
Diluted EPSper diluted share	$0.56	$0.03	-$0.47	-$0.72	-$1.68	-$1.25	-$1.08

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

9.52%of listed shares

BlackRock, Inc.48.75M shares · Jun 30, 2026

View holders

Top 20 reported holders of TOST
Holder	% owned
BlackRock, Inc.	9.52%48.75M shares
FMR LLC	6.55%33.53M shares
Capital International Investors	5.22%26.74M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.31%22.09M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.28%21.91M shares
STATE STREET CORP	3.30%16.89M shares
JPMORGAN CHASE & CO	3.29%16.84M shares
PRINCIPAL FINANCIAL GROUP INC	2.96%15.16M shares
ValueAct Holdings, L.P.	2.76%14.13M shares
MORGAN STANLEY	2.23%11.39M shares
ALLIANCEBERNSTEIN L.P.	2.13%10.9M shares
GEODE CAPITAL MANAGEMENT, LLC	1.91%9.75M shares
Balyasny Asset Management L.P.	1.39%7.13M shares
CITADEL ADVISORS LLC	1.34%6.87M shares
Sumitomo Mitsui Trust Group, Inc.	1.34%6.86M shares
PRICE T ROWE ASSOCIATES INC /MD/	1.24%6.35M shares
UBS Group AG	1.14%5.82M shares
NORGES BANK	1.13%5.77M shares
BANK OF AMERICA CORP /DE/	1.00%5.11M shares
BNP PARIBAS ASSET MANAGEMENT Holding S.A.	0.93%4.74M shares

Percentages use 512M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)198$231.99M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 29, 2026Form 4 · 10b5-1	Elworthy Brian RGeneral Counsel	SellClass A Common Stock	15.1K	$26.15	$395.8K	189.6K
May 29, 2026Form 4 · 10b5-1	Elworthy Brian RGeneral Counsel	SellClass A Common Stock	92.9K	$25.85	$2.40M	204.8K
Apr 2, 2026Form 4	Vassil JonathanChief Revenue Officer	SellClass A Common Stock	6.4K	$26.19	$168.6K	146.6K
Apr 2, 2026Form 4	Elworthy Brian RGeneral Counsel	SellClass A Common Stock	3.7K	$26.19	$96.0K	243.6K
Apr 2, 2026Form 4	Fredette StephenPresident	SellClass A Common Stock	7.3K	$26.19	$190.9K	921.0K