Toast Inc Dossier - Source-backed chat

Toast Inc

TOSTNYSE

SectorInformation Technology

IndustrySoftware - Infrastructure

Beta (adjusted)1.48

Intrinsic Value $43.29median of 6 methods · middle span $34-$87based on filings through 30 Jun 2026

Market Price $28.99Price as of 30 Sep 2026

UndervaluedIntrinsic value is 49% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

Data confidence Sign in to view data confidence

Market Cap $16.8B

Enterprise Value $15.7B

Shares Outstanding 599M diluted

Moat Rating Wide

Next Earnings Date3 Nov 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Toast enters the second half of 2026 with strong operating momentum: Q2 ARR increased 25% to USD 2.409 billion, locations grew 22% to approximately 180,000, and recurring non-GAAP gross profit rose 28%. Profitability also improved, with Q2 operating income of USD 152 million and adjusted EBITDA of USD 221 million, while management raised full-year recurring-gross-profit and adjusted-EBITDA guidance. Enterprise, international, retail, hospitality, and agentic-commerce initiatives provide additional expansion paths. However, the official delayed share price of USD 35.15 on August 28 already reflects meaningful execution success. A USD 40 base case therefore offers only moderate prospective appreciation relative to execution, restaurant-activity, payments, and competition risks, supporting a Hold rather than a Buy.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets26 analysts · as of 18 Aug 2026

Low · most bearish analyst$25.00

Mean target$38.62

High · most bullish analyst$45.00

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$25.0020%

Restaurant activity weakens, customer additions and payment volumes slow, or competitive pricing limits monetization, taking recurring gross-profit growth below 20%. Toast then misses the USD 805 million lower bound of its full-year adjusted-EBITDA outlook as reinvestment and expansion costs outpace gross-profit growth. Reduced confidence in durable operating leverage supports a USD 25 downside scenario.

Base CaseCentral scenario

$38.6255%

Matches the consensus mean

Toast delivers within its Q3 recurring-gross-profit guidance of USD 615 million-USD 625 million and full-year adjusted-EBITDA guidance of USD 805 million-USD 825 million, while location and ARR growth gradually normalize from Q2's 22% and 25% rates. New products and verticals contribute incrementally, but valuation expansion is restrained as growth moderates.

Bull CaseUpside scenario

$45.0025%

Toast sustains location and ARR growth near or above 20%, recurring gross-profit growth remains comfortably above management's Q3 range, and adjusted EBITDA exceeds the upper end of the USD 805 million-USD 825 million full-year outlook. Enterprise hospitality wins, international deployments, retail penetration, Toast IQ products, and commission-free ordering through Google Maps broaden adoption and monetization.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Q2 2026 ARR grew 25% to USD 2.409 billion, while total locations increased 22% to approximately 180,000, demonstrating continued platform expansion.
Q2 operating income reached USD 152 million and adjusted EBITDA reached USD 221 million; management also raised full-year adjusted-EBITDA guidance to USD 805 million-USD 825 million.
Toast is expanding beyond its core restaurant base through enterprise hospitality, international deployments, retail offerings, Toast IQ products, and agentic ordering through Google Maps.

Key Investment Risks

ARR and payments economics depend on customer activity and GPV; Toast states that ARR can fluctuate with customer satisfaction, pricing, competition, economic conditions, and guest spending.
Q2 free cash flow declined to USD 130 million from USD 208 million a year earlier, while inventory and investment in growth initiatives increased the importance of disciplined execution.
The USD 35.15 official delayed share price embeds expectations for sustained growth and operating leverage, leaving downside if recurring gross-profit growth falls materially below current guidance.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

Quality Pillars Members

This section is available to registered members. Create a free account or sign in to unlock the full breakdown.

Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.