Is Toast, Inc. (TOST) A Good Stock To Buy Now?

Is TOST a good stock to buy? We came across a bullish thesis on Toast, Inc. on r/ValueInvesting by Primary-Abies9041. In this article, we will summarize the bulls’ thesis on TOST. Toast, Inc.'s share was trading at $24.66 as of June 18th. TOST’s trailing and forward P/E were 36.81 and 18.55 respectively according to Yahoo Finance.

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States and internationally. TOST is presented as a compelling investment opportunity based on the strength of its business model, expanding market opportunity, and what is viewed as a significant disconnect between its operating performance and valuation.

The company is best known for providing point-of-sale (POS) solutions to restaurants, but the bullish thesis argues that the market is underestimating both the durability of its competitive advantages and its long-term growth potential.

Toast continues to deliver strong operating results, with revenue growing approximately 20% year over year and gross profit increasing 27% in the most recent quarter. The company has also recently crossed an important inflection point by achieving profitability, demonstrating that it can grow while simultaneously expanding earnings. Beyond its core restaurant market, Toast is increasingly targeting adjacent verticals such as grocery stores and gas stations, providing a meaningful runway for future expansion and increasing its total addressable market.

A key differentiator is its purpose-built, ruggedized hardware system designed specifically for demanding restaurant environments. Unlike competitors that rely primarily on generic tablet-based solutions, Toast’s integrated hardware and software ecosystem creates a more reliable and sticky product offering, strengthening customer retention and reinforcing its competitive moat. The thesis also challenges the broader market narrative that software businesses face imminent disruption from AI-powered alternatives.

While some software providers may be vulnerable due to low switching costs, Toast’s combination of specialized hardware, embedded workflows, payments integration, and strong brand recognition among restaurant operators makes displacement considerably more difficult. Despite these advantages, the stock trades at roughly 37x earnings and about 18x forward earnings, valuations that are viewed as attractive given the company’s growth profile.

If earnings continue to scale while the valuation multiple remains stable, shareholders could benefit from substantial appreciation, while any continued share-price weakness alongside rising profitability could create an even more compelling value opportunity over the long term.

Previously, we covered a bullish thesis on Toast, Inc. (TOST) by Nikhs in March 2025, which highlighted the company’s vertically integrated restaurant technology platform, expanding profitability, AI-driven innovation, and growth opportunities across enterprise, international, and retail markets. TOST's stock price has depreciated by approximately 31.27% since our coverage. Primary-Abies9041 shares a similar view but emphasizes Toast’s attractive valuation, hardware-driven competitive moat, and expansion into adjacent verticals beyond restaurants.

Toast, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held TOST at the end of the first quarter which was 68 in the previous quarter. While we acknowledge the risk and potential of TOST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TOST and that has 10,000% upside potential, check out our report about this cheapest AI stock.