Toast, Inc. TOST is set to report its second-quarter 2026 results on Aug. 4, after market close.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.87 billion, indicating an increase of 20.8% from the year-ago quarter’s reported figure.
The consensus mark for earnings per share (EPS) is pinned at 32 cents and has remained unchanged over the past two months. It indicates a rise of 33.3% from the figure reported in the year-ago quarter.
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The company’s EPS surpassed the Zacks Consensus Estimate in two of the trailing four quarters, met once and missed on another, with the average surprise being 0.89%. The graph below depicts this surprising history:
Toast, Inc. Price and EPS Surprise
Toast, Inc. price-eps-surprise | Toast, Inc. Quote
TOST’s Q2 Earnings Whispers
However, our proprietary model does not conclusively predict an earnings beat for Toast this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Toast crrently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Factors Likely to Shape Toast’s Q2 Results
Toast’s second-quarter performance is likely to have been shaped by strong revenue momentum and increased adoption of AI-driven products. The company’s ability to leverage AI-driven innovation and deepen its value proposition for restaurant operators bodes well for long-term prospects.
Strong customer momentum across the Subscription and FinTech segments is likely to have aided TOST’s top and bottom lines. It expects second-quarter non-GAAP total subscription and fintech gross profit in the range of $565-$575 million, implying 22-24% year-over-year growth. Adjusted EBITDA is projected to be between $185 million and $195 million.
Toast is likely to have strengthened its growth case ahead of second-quarter results as its expansion beyond its core restaurant base has continued to broaden its total addressable market and drive new highs in Annualized Recurring Run-Rate (ARR). The company may have benefitted from this broader mix while still continuing to apply its vertical playbook with discipline, which is expected to have supported momentum into the second quarter.
However, higher tariff-related costs are likely to have been a spoilsport for Toast in the to-be-reported quarter.
Q2 Projections for TOST
The Zacks Consensus Estimate for Toast’s subscription services revenues is pegged at $283.5 million, which suggests a 24.9% increase from the year-ago quarter.
The consensus mark for revenues from financial technology solutions is pegged at $1.55 billion for the second quarter, up 21.2% from the year-ago period.
The consensus mark for Gross Payment Volume (GPV) is pinned at $60.31 billion, which is above the company’s reported figure of $49.9 billion in the year-ago quarter. The consensus mark for the total ARR is pegged at $2.39 billion, up from the year-ago figure of $1.93 billion.
The consensus mark for total locations served stands at 179,375, up from 148,000 reported a year ago.
However, the Zacks Consensus Estimate for hardware and professional services is pegged at $44.3 billion, indicating a decline from $47 million reported year over year.
TOST’s Price Performance & Valuation
Toast’s shares have gained 9.7% in the past three months. The Zacks Internet Software Market and the S&P 500 have increased 0.5% and 3.1%, respectively, over the same period. Peers like PayPal, Inc. PYPL and Lightspeed Commerce, Inc. LSPD continue to expand their offerings, challenging Toast’s dominance in the global technology platform built for restaurant and retail businesses. PayPal shares have increased 13.5%, while Lightspeed shares have gained 5.8% over the same time frame.
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From a valuation standpoint, in terms of forward 12-month Price/Sales (P/S), TOST stock is trading at 2.04X compared with the Zacks Internet Software Market industry’s 3.76X.
On the other hand, PYPL trades at 1.38X forward 12-month P/S, while LSPD trades near 1.06X forward 12-month P/S.
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TOST: Buy, Sell or Hold?
Toast is a solid company with strong growth, improving margins and a clear product strategy. Its rising location count, AI roadmap and new-market expansion continue to support the long-term story. However, higher costs are likely to have posed challenges in the to-be-reported quarter.
Given its strategic advantages and the existing headwinds, the stock is best treated as a hold. For long-term investors, its important to wait before adding to positions due to short-term volatility.
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This article originally published on Zacks Investment Research (zacks.com).