Toast (TOST) Stock Forecast & Price Target

Toast is experiencing significant financial momentum, as evidenced by an increase in expected Adjusted EBITDA to a range of $565-$585 million, which is an improvement from a previous estimate of $540-$560 million. The company has demonstrated strong market penetration, registering a record addition of 8,500 locations in the second quarter, thus bolstering its position in the US restaurant sector. Furthermore, for fiscal year 2025, Toast projects gross profit from subscription services and FinTech solutions to rise to approximately $1.815-$1.835 billion, up from earlier expectations of $1.775-$1.795 billion, indicating positive growth in recurring revenue driven by both location expansion and increased revenue per location.

The financial outlook for Toast is negatively impacted by several key factors, including the potential stalling of recurring revenue growth due to a prolonged economic downturn that could dampen consumer spending and slow new restaurant openings. Additionally, the company is currently not profitable and is expected to continue incurring losses in the near term, raising concerns about its ability to effectively scale its business model amidst execution risks. Furthermore, ongoing supply chain challenges, particularly chip shortages, may hinder hardware availability, extend implementation timelines, and delay customer onboarding, further constraining growth prospects.