Toast (TOST) has just wrapped up FY 2025 with revenue of about US$3.3b in the second half and basic EPS of US$0.35, while full year trailing twelve month figures sit at US$6.2b of revenue and EPS of US$0.59. This sets a clear snapshot of its recent earnings power. Over the past few reporting periods the company has seen revenue move from US$2.6b and EPS of US$0.16 in the second half of 2024 to US$2.9b and EPS of US$0.24 in the first half of 2025, and then to US$3.3b and EPS of US$0.35 in the latest half. This has occurred alongside very large year over year growth in earnings and an uplift in net profit margin to 5.6%, which together point to a period where profitability has shifted meaningfully for investors.

See our full analysis for Toast.

With the latest margins and earnings now on the table, the next step is to see how these results line up with the widely held narratives around Toast's growth, quality and risk profile, and where those stories might need updating.

TTM profit reaches US$342 million

• Over the last twelve months, Toast recorded net income of US$342 million on US$6.2b of revenue, compared with US$19 million on US$5.0b of revenue in the prior trailing period. This lines up with the move in net profit margin from 0.4% to 5.6%.
• Consensus narrative expects revenue to reach US$10.1b and earnings of US$935.1 million by around 2029. The step up in trailing net income from US$19 million to US$342 million supports the view of a more profitable business, although the jump in margin to 5.6% leaves less room for error if future cost trends differ from analysts’ expectations.
  • Analysts are also assuming margins rise further to 9.2%, so the current 5.6% leaves a gap that still needs to be closed.
  • The current share price of US$29.38 sits below the US$36.36 analyst target, which indicates the market is not fully pricing in those longer term earnings assumptions yet.

EPS and margins vs bullish targets

• Basic EPS over the last twelve months is US$0.59, up from US$0.03 in the prior trailing period. This is consistent with the very large year over year earnings increase cited and the margin move from 0.4% to 5.6%.
• Bulls point to a path to US$1.2b of earnings and EPS of US$2.24 by about 2028, yet the current US$342 million of trailing net income and EPS of US$0.59 indicate the business would still need a multi fold increase in earnings, while the 5.6% margin sits below the 11.7% margin that bullish scenarios reference.
  • The bullish view also assumes Toast trades on a 38.7x P/E in 2028, whereas today the trailing P/E is 49.8x, so either earnings growth or a lower multiple would have to close that gap.
  • Very large trailing earnings growth supports the idea of momentum, but the move from 5.6% margins to over 11% represents a separate execution step that is not yet visible in the current figures.

On these numbers, bulls argue Toast’s recent swing to profitability could represent the early phase of the earnings ramp they are betting on, while skeptics may focus on how much growth would still need to materialize to align with those higher margin and EPS targets. 🐂 Toast Bull Case

Premium 49.8x P/E and bearish worries

• The stock trades on a trailing P/E of 49.8x against an industry average of 17.1x and a peer average of 36.9x, while at the same time being about 13.8% below the cited DCF fair value of US$34.07.
• Bears highlight that even the more cautious scenario assumes earnings of US$574.5 million by 2028 and a 48.7x P/E at that point. Today Toast already carries a 49.8x P/E on US$342 million of trailing earnings, so any slowdown from the ~27.2% forecast earnings growth rate or the ~15.2% forecast revenue growth could leave the current premium multiple exposed.
  • The improvement from 0.4% to 5.6% net margin helps explain why the market is willing to pay a higher multiple now. It also means maintaining or extending that margin becomes central to the bearish concern about overpaying.
  • The gap between the US$29.38 share price and the US$36.36 analyst target is smaller than the difference between 49.8x and sector level P/E multiples, which gives bears room to argue that relative valuation risk remains even with some implied upside to the target.

Skeptics warn that with a P/E already above both industry and peer averages, Toast has less room for disappointment if the forecast growth rates or margins soften from the current trajectory. 🐻 Toast Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Toast on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Given this mix of optimism and caution around Toast, it helps to look past headlines and focus on the numbers yourself. To see why some investors are encouraged by the upside case, start with the 3 key rewards

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Toast’s premium 49.8x P/E, reliance on further margin expansion from 5.6% to meet bullish targets, and the gap to analyst forecasts all highlight valuation risk.

If that premium and execution risk makes you cautious, compare it with companies screened for stronger value signals and earnings support using the 51 high quality undervalued stocks

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.