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Toast vs. Block: Which POS Platform Stock Offers More Upside?
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Key Takeaways
Toast added 8,500 net new locations, driving 24% growth and higher penetration in SMB markets.
Block's Square saw GPV rising 10% and strong food & beverage growth, aided by new QSR wins.
Analysts lifted earnings estimates 12.8% for TOST and 3.6% for XYZ for the current year.
Toast Inc. (TOST - Free Report) and Block Inc. (XYZ - Free Report) are leading players in the merchant payments and point-of-sale (POS) space. TOST provides software-as-a-service (SaaS) and hardware solutions focused on the restaurant market. On the other hand, Block is a diversified fintech company, and its Square for Restaurants POS platform competes directly with TOST’s offerings.
Both firms are tapping into the ongoing digitization of payments and the rise of integrated software platforms for small businesses to gain a larger share of the profitable POS market, which is expected to witness a CAGR of 8.1% between 2025 and 2030 and reach $181.47 billion, per a Grand View Research report.
Let’s deep dive and find out which POS stock offers greater upside in this fast-growing market.
Toast: Restaurant Focused Disruptor
Efforts to expand its presence in the core U.S. SMB restaurant market, as well as drive growth across three new growth areas: enterprise, international, and food & beverage retail markets, look promising. TOST added a record 8,500 net new locations, ending the second quarter with 148,000 total locations, a 24% increase year over year. Toast continues to increase market share in nearly every SMB market it serves, even in large and small metro areas where penetration exceeds 30%, highlighting that its local go-to-market strategy is working. Management expects net additions in 2025 to surpass those in 2024.
Toast exceeded 10,000 live locations across enterprise, international, and food & beverage retail segments in the second quarter and is on track to top $100 million in ARR by 2025-end. Wins such as Firehouse Subs highlight traction among large QSR brands. This will boost upselling and platform expansion. It also ventured into Australia, its fourth international market after the U.K., Ireland and Canada.
Toast’s AI-powered tools are positioning it to stay ahead of the curve in restaurant technology. It launched Toast Go 3 Handheld, which uses ToastIQ with built-in cellular connectivity, thereby making it simpler for restaurant staff to take orders, process payments and print receipts effortlessly across cellular and Wi-Fi networks. It is lighter and now has a 24-hour battery life. ToastIQ is an AI-powered intelligence engine that combines restaurant expertise, data and AI to enhance its platform.
Driven by strong results and continued momentum, TOST now expects 29% growth (earlier guided to 26%) in fintech and subscription gross profit for 2025 at the midpoint, while adjusted EBITDA is now estimated at $575 million ($550 million was the previous projection), with a 32% margin, an increase of five percentage points from 2024.
Nonetheless, heightened uncertainty prevailing over the macro environment amid escalating trade war, with tariff troubles raising fears of increased costs and dampening of consumer purchasing power, remains a concern. Decline in Gross Payment Volume or GPV per location is another headwind, as it implies lower average transaction volumes. TOST’s overall GPV surged 23% year over year to $50 billion in the second quarter, but GPV per location declined 1% year over year.
Block: Diversified Fintech With Rising POS Momentum
Block’s two growth drivers, Square and Cash App, are powering its fintech ecosystem. Square’s POS serves a wide variety of businesses — retailers, service providers and restaurants — giving it a broad customer base that helps reduce risk tied to any single industry. It remains focused on new product launches to drive revenues for Square.
XYZ recently launched Square AI, which uses an AI agent, codenamed goose and is powered by Square data. It is designed to give sellers quick, data-driven insights into their businesses. Integrated directly into the Square Dashboard, it allows sellers to work smarter and faster by using a conversational interface to uncover sales trends, identify top-selling items by time of day, analyze customer spending behaviors and more. This feature highlights Block’s efforts to bring advanced AI capabilities to its sellers. In May, TOST launched Square Handheld in the United States and is now introducing it in international territories.
In the last reported quarter, the Square ecosystem accounted for $1.76 billion in transaction revenues, up 8.8% year over year. Square GPV growth accelerated to 10% while gross profit was up 11%, which included the benefit of a previously disclosed network remediation payment. Food and beverage businesses saw particularly strong momentum with GPV up 15%, and retail followed with a 10% increase. International GPV was up 25% year-over-year growth, driven by stronger sales and partnerships.
Management highlighted that Square is now sharply focused on expanding in the QSR segment. Square is also benefiting from a renewed go-to-market strategy, with investments across marketing, field sales, and partnerships. The company’s field sales performance was especially strong in the second quarter, delivering its highest-ever level of new volume added, and marking its best growth in new volume since the third quarter of 2021. XYZ highlighted that the forecasted gross profit added from new clients exceeded the forecasted GPV added on a year-to-date basis, which signals healthy pricing and product attach rates.
Management guided for low double-digit GPV growth for Square in both the third and fourth quarters, representing a modest acceleration from the 10% growth witnessed in the second quarter. However, gross profit growth for the third quarter is expected to be in the high single-digit range, affected by two near-term headwinds. First, the company made the decision to increase operational flexibility at a key processing partner, which will raise processing costs. Second, it is continuing to invest in hardware as an effective go-to-market tool.
TOST vs XYZ Stock Performance
TOST and XYZ have declined 11.2% and 1.8%, respectively, over the past month.
Image Source: Zacks Investment Research
Valuation for TOST & XYZ
Both TOST and Block are overvalued, as suggested by the Value Score of F and D, respectively.
Image Source: Zacks Investment Research
In terms of twelve-month forward price/earnings, TOST shares are trading at 37.99X, higher than XYZ’s 24.17X.
How Do Zacks Estimates Compare for TOST & XYZ?
Analysts have revised their earnings estimates upward by 12.8% for TOST’s bottom line for the current year.
Image Source: Zacks Investment Research
For XYZ, analysts have revised estimates by 3.6% upward for the current year.
TOST’s focus on the restaurant ecosystem, paired with rapid enterprise and international penetration, gives it a scalable growth runway. With AI-driven product launches enhancing stickiness and upsell potential, TOST offers greater upside in the POS race.
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Toast vs. Block: Which POS Platform Stock Offers More Upside?
Key Takeaways
Toast Inc. (TOST - Free Report) and Block Inc. (XYZ - Free Report) are leading players in the merchant payments and point-of-sale (POS) space. TOST provides software-as-a-service (SaaS) and hardware solutions focused on the restaurant market. On the other hand, Block is a diversified fintech company, and its Square for Restaurants POS platform competes directly with TOST’s offerings.
Both firms are tapping into the ongoing digitization of payments and the rise of integrated software platforms for small businesses to gain a larger share of the profitable POS market, which is expected to witness a CAGR of 8.1% between 2025 and 2030 and reach $181.47 billion, per a Grand View Research report.
Let’s deep dive and find out which POS stock offers greater upside in this fast-growing market.
Toast: Restaurant Focused Disruptor
Efforts to expand its presence in the core U.S. SMB restaurant market, as well as drive growth across three new growth areas: enterprise, international, and food & beverage retail markets, look promising. TOST added a record 8,500 net new locations, ending the second quarter with 148,000 total locations, a 24% increase year over year. Toast continues to increase market share in nearly every SMB market it serves, even in large and small metro areas where penetration exceeds 30%, highlighting that its local go-to-market strategy is working. Management expects net additions in 2025 to surpass those in 2024.
Toast exceeded 10,000 live locations across enterprise, international, and food & beverage retail segments in the second quarter and is on track to top $100 million in ARR by 2025-end. Wins such as Firehouse Subs highlight traction among large QSR brands. This will boost upselling and platform expansion. It also ventured into Australia, its fourth international market after the U.K., Ireland and Canada.
Toast’s AI-powered tools are positioning it to stay ahead of the curve in restaurant technology. It launched Toast Go 3 Handheld, which uses ToastIQ with built-in cellular connectivity, thereby making it simpler for restaurant staff to take orders, process payments and print receipts effortlessly across cellular and Wi-Fi networks. It is lighter and now has a 24-hour battery life. ToastIQ is an AI-powered intelligence engine that combines restaurant expertise, data and AI to enhance its platform.
Driven by strong results and continued momentum, TOST now expects 29% growth (earlier guided to 26%) in fintech and subscription gross profit for 2025 at the midpoint, while adjusted EBITDA is now estimated at $575 million ($550 million was the previous projection), with a 32% margin, an increase of five percentage points from 2024.
Nonetheless, heightened uncertainty prevailing over the macro environment amid escalating trade war, with tariff troubles raising fears of increased costs and dampening of consumer purchasing power, remains a concern. Decline in Gross Payment Volume or GPV per location is another headwind, as it implies lower average transaction volumes. TOST’s overall GPV surged 23% year over year to $50 billion in the second quarter, but GPV per location declined 1% year over year.
Block: Diversified Fintech With Rising POS Momentum
Block’s two growth drivers, Square and Cash App, are powering its fintech ecosystem. Square’s POS serves a wide variety of businesses — retailers, service providers and restaurants — giving it a broad customer base that helps reduce risk tied to any single industry. It remains focused on new product launches to drive revenues for Square.
XYZ recently launched Square AI, which uses an AI agent, codenamed goose and is powered by Square data. It is designed to give sellers quick, data-driven insights into their businesses. Integrated directly into the Square Dashboard, it allows sellers to work smarter and faster by using a conversational interface to uncover sales trends, identify top-selling items by time of day, analyze customer spending behaviors and more. This feature highlights Block’s efforts to bring advanced AI capabilities to its sellers. In May, TOST launched Square Handheld in the United States and is now introducing it in international territories.
In the last reported quarter, the Square ecosystem accounted for $1.76 billion in transaction revenues, up 8.8% year over year. Square GPV growth accelerated to 10% while gross profit was up 11%, which included the benefit of a previously disclosed network remediation payment. Food and beverage businesses saw particularly strong momentum with GPV up 15%, and retail followed with a 10% increase. International GPV was up 25% year-over-year growth, driven by stronger sales and partnerships.
Management highlighted that Square is now sharply focused on expanding in the QSR segment. Square is also benefiting from a renewed go-to-market strategy, with investments across marketing, field sales, and partnerships. The company’s field sales performance was especially strong in the second quarter, delivering its highest-ever level of new volume added, and marking its best growth in new volume since the third quarter of 2021. XYZ highlighted that the forecasted gross profit added from new clients exceeded the forecasted GPV added on a year-to-date basis, which signals healthy pricing and product attach rates.
Management guided for low double-digit GPV growth for Square in both the third and fourth quarters, representing a modest acceleration from the 10% growth witnessed in the second quarter. However, gross profit growth for the third quarter is expected to be in the high single-digit range, affected by two near-term headwinds. First, the company made the decision to increase operational flexibility at a key processing partner, which will raise processing costs. Second, it is continuing to invest in hardware as an effective go-to-market tool.
TOST vs XYZ Stock Performance
TOST and XYZ have declined 11.2% and 1.8%, respectively, over the past month.
Image Source: Zacks Investment Research
Valuation for TOST & XYZ
Both TOST and Block are overvalued, as suggested by the Value Score of F and D, respectively.
Image Source: Zacks Investment Research
In terms of twelve-month forward price/earnings, TOST shares are trading at 37.99X, higher than XYZ’s 24.17X.
How Do Zacks Estimates Compare for TOST & XYZ?
Analysts have revised their earnings estimates upward by 12.8% for TOST’s bottom line for the current year.
Image Source: Zacks Investment Research
For XYZ, analysts have revised estimates by 3.6% upward for the current year.
Image Source: Zacks Investment Research
TOST or XYZ: Which is a Better Pick?
TOST and XYZ currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TOST’s focus on the restaurant ecosystem, paired with rapid enterprise and international penetration, gives it a scalable growth runway. With AI-driven product launches enhancing stickiness and upsell potential, TOST offers greater upside in the POS race.