Toast (TOST) Stock Forecast & Price Target

Toast's revenue from Financial Technology Solutions experienced a significant growth of 28% year-over-year, reaching $1,090 million, driven by strong market share gains projected at 2-2.5% annually through 2027. The company reported a notable increase in recurring gross profit to $392 million from $281 million the previous year, alongside a 41% year-over-year rise in subscription revenue, which totaled $200 million. Additionally, the firm demonstrated its ability to strengthen its position in the US restaurant market, adding 7,000 locations in the fourth quarter while also expanding into emerging verticals and enhancing margins.

The analysis indicates a concerning trend for Toast's financial performance, highlighted by a decline in gross platform volume (GPV) per location from $328k in the prior quarter to $319k, and flat performance year-over-year. Despite improved operating income of $32 million, the company remains unprofitable and is expected to face continued losses due to ongoing investments for growth, which raises execution risks if scaling does not materialize successfully. Future revenue growth is projected to stall, with hardware and professional services revenue estimated to remain flat, alongside a potential decline in hardware gross profit, all exacerbated by adverse macroeconomic conditions affecting consumer spending.