Toast stock climbed on Friday buoyed by strong business trends for the provider of restaurant software, though the company reported first quarter earnings and revenue slightly below estimates. Toast stock broke out from a newly forged cup base.
On the stock market today, Toast stock popped 8.2% to 39.65. Heading into the Toast earnings report, shares were about even in 2025.
"Toast once again differentiated itself from the field, averting the macro pressures that drove shares lower among some of its competitors," said Adam Frisch, Evercore ISI analyst in a report. "Weaker new location adds were shrugged off in the wake of annual recurring revenue beats, an improved guide, and more importantly, highly bullish commentary around new location adds for the June quarter."
Toast earnings for the March quarter rose 53% on an adjusted basis but came in below estimates of 20 cents. Revenue climbed 24% to $1.344 billion, just below estimates of $1.351 billion.
However, annual recurring revenue rose 31% to $1.713 million, topping estimates of $1.689 million. Live customer locations increased 25% to 140,000, topping estimates of 137,100.
New Customers Applebee's And Topgolf
"Toast's progress with enterprise brands continued in the quarter, including announcing Applebee's in April for a (roughly 1,500 locations, the largest Toast customer win to date)," said William Blair analyst Stephen Sheldon in a report. "Today announced that it won Topgolf for a wide range of software along with payments (close to 100 locations in the U.S.). Toast's enterprise traction is encouraging and the CEO noted that Toast's enterprise pipeline has 'never been stronger.'"
Toast's products range from point-of-sale hardware, kitchen displays, payment processing, supplier and invoice management to payroll, delivery management, menu consultation and marketing programs.
Toast's main competitors include Square-parent Block, Fiserv's Clover, Shift4, Lightspeed, TouchBistro and SpotOn.
Toast Stock Technical Ratings
With Friday's gain, Toast stock is set to move past a 36.65 buy point from a cup-with-handle base.
The company was founded in 2012, but Toast stock didn't go public until September 2021. The initial public offering raised $870 million.
Meanwhile, Toast stock holds an IBD Composite Rating of 97, according to IBD Stock Checkup.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. Also, the best growth stocks have a Composite Rating of 90 or better.
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