Toast’s Comeback Story Is Getting Harder for Wall Street to Ignore

Summary

Toast Inc. NYSE: TOST shares have rallied sharply into mid-July. Analysts are becoming bullish on the company’s Toast IQ artificial intelligence (AI) platform that launched in October 2025. Toast Today$30.46 +0.07 (+0.24%) As of 11:59 AM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$22.26▼$49.66P/E Ratio46.86Price Target$37.59The tool is boosting total revenue and annual recurring revenue (ARR). Toast’s first-quarter results showed approximately 7,000 net new locations and 26% year-over-year ARR growth to $2.2 billion. That was punctuated by The Goldman Sachs Group, which upgraded the stock from Neutral to Buy and raised its price target to $36. The firm was bullish about Toast IQ, which it believes will increase the company’s average revenue per user. Toast has also been increasing its number of accounts, a trend Goldman Sachs believes will continue. Since the rally, TOST is about 20% below its consensus price target of $37.59. But at a time when investors have higher growth options, the simple question is whether TOST is fairly priced or undervalued. Toast AI Platform Is Driving Revenue and ARR GrowthOn June 10, Toast published data about how its customers used Toast IQ in the first quarter of 2026. The results make clear that restaurant owners are looking for insights to increase the profitability and efficiency of their restaurants. That supports the idea that revenue gains will continue. However, the company is also facing the costs associated with AI. That means balancing higher hardware and memory costs that could put margins under pressure. Why Interest Rates Still Matter for TOSTSince going public in 2021, TOST stock has been impacted by the direction of interest rates. It soared to around $51 a share after the IPO. However, this was a time when stimulus money flowed freely, and the revenge travel trade was just getting started. Toast seemed like the right stock at the right time. That is, until it wasn’t. TOST fell...