Toast (TOST) Stock Forecast & Price Target

Toast is positioned for growth, as evidenced by an upward revision in its projected Adjusted EBITDA for fiscal 2024, now expected to reach between $565 million and $585 million, an improvement from the previous range of $540 million to $560 million. The company demonstrates strong momentum in the US restaurant market, achieving a record addition of 8,500 locations in the second quarter alone, which underscores its expanding market share. Additionally, for fiscal year 2025, Toast anticipates an increase in gross profit from subscription services and FinTech solutions, projected to be between $1.815 billion and $1.835 billion, indicating robust recurring revenue growth driven by both location expansion and enhanced revenue per location.

Toast's stock outlook appears negative due to potential stalling in recurring revenue growth, particularly if a prolonged economic downturn impacts consumer spending and slows new restaurant openings. The company remains unprofitable as it continues to invest in growth, raising concerns over execution risk if its business model fails to scale effectively. Additionally, ongoing supply chain challenges and chip shortages may hinder hardware availability, further delaying customer onboarding and growth prospects, while the broader payments industry's focus on inflation and economic uncertainty adds further pressure to Toast's financial trajectory.