Toast, Inc.
Toast, Inc. Fundamental Analysis
Toast, Inc. (TOST) shows moderate financial fundamentals with a PE ratio of 43.44, profit margin of 5.56%, and ROE of 17.93%. The company generates $6.2B in annual revenue with strong year-over-year growth of 28.33%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 73.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TOST's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTOST demonstrates superior asset utilization.
Valuation Score
ModerateTOST shows balanced valuation metrics.
Growth Score
ModerateTOST shows steady but slowing expansion.
Financial Health Score
ExcellentTOST maintains a strong and stable balance sheet.
Profitability Score
ModerateTOST maintains healthy but balanced margins.
Key Financial Metrics
Is TOST Expensive or Cheap?
P/E Ratio
TOST trades at 43.44 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TOST's PEG of 1.70 indicates fair valuation.
Price to Book
The market values Toast, Inc. at 6.99 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 41.63 times EBITDA. This signals the market has high growth expectations.
How Well Does TOST Make Money?
Net Profit Margin
For every $100 in sales, Toast, Inc. keeps $5.56 as profit after all expenses.
Operating Margin
Core operations generate 4.81 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $17.93 in profit for every $100 of shareholder equity.
ROA
Toast, Inc. generates $10.87 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Toast, Inc. produces operating cash flow of $662.12M, showing steady but balanced cash generation.
Free Cash Flow
Toast, Inc. produces free cash flow of $609.03M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.03 in free cash annually.
FCF Yield
TOST converts 4.10% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
43.44
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.70
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.99
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.75
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.18
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How TOST Stacks Against Its Sector Peers
| Metric | TOST Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 43.44 | 34.79 | Worse (Expensive) |
| ROE | 17.93% | 1185.00% | Weak |
| Net Margin | 5.56% | -131296.00% (disorted) | Weak |
| Debt/Equity | 0.02 | 0.43 | Strong (Low Leverage) |
| Current Ratio | 2.75 | 4.90 | Strong Liquidity |
| ROA | 10.87% | -325472.00% (disorted) | Strong |
TOST outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Toast, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
515.34%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
107.50%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
335.72%
Industry Style: Growth, Innovation, High Beta
High Growth