Earnings To Watch: Toast (TOST) Reports Q1 Results Tomorrow

Jabin Bastian /
2022/05/11 7:53 am EDT

Restaurant software platform Toast (NYSE:TOST) will be reporting earnings tomorrow after market hours. Here's what to expect.

Last quarter Toast reported revenues of $512 million, up 111% year on year, beating analyst revenue expectations by 4.93%. Despite the strong top-line growth, It was a mixed quarter for the company, with a decent beat of analysts' estimates but an underwhelming guidance for the next year.

Is Toast buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Toast's revenue to grow 39.3% year on year to $490.4 million, slowing down from the 104% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.12 per share.

Toast Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 8.55%.

Looking at Toast's peers in the vertical software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Olo delivered top-line growth of 18.3% year on year, beating analyst estimates by 2.63% and Unity reported revenues up 36.3% year on year, missing analyst estimates by 0.32%. Olo traded flat on the results, and Unity was down 32.5%. Read our full analysis of Olo's results here and Unity's results here.

Tech stocks have been under pressure since the end of last year and software stocks have not been spared, with share price down on average 24.4% over the last month. Toast is down 28.1% during the same time, and is heading into the earnings with analyst price target of $28.1, compared to share price of $13.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.