Toast (TOST) To Report Earnings Tomorrow: Here Is What To Expect

Kayode Omotosho /
2023/11/06 2:02 am EST

Restaurant software platform Toast (NYSE:TOST) will be reporting results tomorrow after market close. Here's what to look for.

Last quarter Toast reported revenues of $978 million, up 44.9% year on year, beating analyst revenue expectations by 3.5%. It was a solid quarter for the company, with strong sales guidance for the next quarter and a decent beat of analysts' revenue estimates.

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 37.3% year on year to $1 billion, slowing down from the 54.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.01 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 over the past two years on average by 5.9%.

Looking at Toast's peers in the vertical software segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Agilysys delivered top-line growth of 22.8% year on year, beating analyst estimates by 3.1% and Cadence reported revenues up 13.4% year on year, exceeding estimates by 1.8%. Agilysys traded up 21.7% on the results, Cadence was down 0.9%.

Read our full analysis of Agilysys's results here and Cadence's results here.

The technology sell-off has been putting pressure on stocks and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share price declining 2.7% over the last month. Toast is up 4.6% during the same time, and is heading into the earnings with with analyst price target of $23.2, compared to share price of $18.

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.

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