Toast’s profit miss has got investors worried, even as revenue growth seems to be better than Wall Street’s expectations.
- Shares of Toast have declined more than 26% so far this year and are likely on track for its worst annual loss on record since going public in 2021.
- Toast’s fourth-quarter revenue rose 22% to $1.63 billion, compared with Wall Street expectations of $1.61 billion, according to data from Fiscal AI.
- The company is heavily investing and said that its growth initiatives include new verticals, product and AI investments, and seeding future growth bets.
Toast stock tumbled nearly 6% after the bell on Thursday, heading for a third straight session of decline if momentum holds, with retail traders calling the firm “overvalued” after the company missed Wall Street expectations for quarterly profit.
The company, which provides restaurants with an Android-based point of sale and management system, is seeing steady demand for its AI-related products, as well as been adding more restaurants to its management services.
Shares of Toast have declined more than 26% so far this year and are likely on track for its worst annual loss on record since going public in 2021. Toast has a market value of $13.5 billion as of Thursday's closing price of $26.14.
A user on Stocktwits said that in comparison to other Fintech’s, Toast was “way overvalued.”
Earnings In A Nutshell
Toast’s fourth-quarter (Q4) revenue rose 22% to $1.63 billion, compared with Wall Street expectations of $1.61 billion, according to data from Fiscal AI. The company’s earnings per share (EPS) came in at $0.17, compared with analysts' estimates of $0.24.
In the fourth quarter, the company partnered with independent restaurants such as Carmine's, Chef Daniel Boulud's restaurants, multiple enterprise chains, including Papa Murphy's, and retailers such as Meadow Lane.
The company also released its conversational AI assistant, Toast IQ, which generates reports and insights about restaurant performance and executes tasks directly in Toast, ranging from menu management to inventory updates.
“For example, Toast IQ can analyze and update menus, tell an operator why their Thursday nights might be slow or why a certain day part is successful, and analyze results across locations,” CEO Aman Narang said.
Toast is investing heavily and said that its growth initiatives include new verticals, product and AI investments, and seeding future growth bets. The company expects 2026 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $775 million to $795 million.
How Are Stocktwits Users Reacting?
Retail sentiment around Toast jumped to ‘extremely bullish’ from ‘bullish’ a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
However, a bearish user on Stocktwits said the firm was “really toasted.”
Another user on the platform questioned whether “anyone here actually pay attention to the company's reporting or it just a bunch of burnt toast memes?” This print seems very strong, the user said.
Shares of Toast have declined 35% in the last 12 months.
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