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Toast (TOST) Registers a Bigger Fall Than the Market: Important Facts to Note

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In the latest close session, Toast (TOST - Free Report) was down 2.84% at $43.03. This move lagged the S&P 500's daily loss of 0.11%. Elsewhere, the Dow saw an upswing of 0.91%, while the tech-heavy Nasdaq depreciated by 0.82%.

Coming into today, shares of the restaurant software provider had gained 3.02% in the past month. In that same time, the Computer and Technology sector gained 8.76%, while the S&P 500 gained 5.17%.

The investment community will be paying close attention to the earnings performance of Toast in its upcoming release. The company is forecasted to report an EPS of $0.23, showcasing a 1050% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.53 billion, up 23.45% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.95 per share and a revenue of $6 billion, representing changes of +3066.67% and +21.06%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Toast. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Toast boasts a Zacks Rank of #3 (Hold).

Investors should also note Toast's current valuation metrics, including its Forward P/E ratio of 46.72. This represents a premium compared to its industry average Forward P/E of 29.16.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 40, placing it within the top 17% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TOST in the coming trading sessions, be sure to utilize Zacks.com.


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