Toast Stock: A Fast-Growing Mid-Cap Eyeing Further Upside
The market has surged to fresh highs in recent weeks, with the technology sector continuing to lead the charge. The Technology Select Sector SPDR Fund (NYSEARCA: XLK) is trading at all-time highs, and within the sector, software names in particular have remained standout performers.
As the bull market extends, appetite for growth and momentum continues to rise, especially for companies with strong technical setups. One name that stands out in this environment is Toast Inc. (NYSE: TOST). Shares of the cloud-based restaurant software company are up over 21% year-to-date, and nearly 200% over the past three years.
Despite a lofty valuation, the stock continues to attract interest, and it may have further room to run.
What Is Toast, Inc.?
Toast, Inc., is a cloud-based restaurant management platform that provides integrated hardware and software solutions. Designed specifically for the full-service and quick-service restaurant industries, Toast enables restaurants to manage real-time orders, payments, operations, and customer engagement.
The platform covers everything from front-of-house point-of-sale terminals and handheld devices to kitchen display systems and self-service kiosks. Since launching its first product in 2013, Toast has expanded rapidly across the U.S., serving independent restaurants, multi-location chains, and franchise groups.
The company has established partnerships with delivery services, financial institutions, and technology vendors to strengthen its ecosystem further. As of Monday’s close, Toast commands a market capitalization of $25.6 billion, solidly placing it in the mid-cap category.
Positive Sentiment and Strong Earnings Momentum
The mid-cap space has been gaining strength overall, with the S&P MidCap 400 ETF (NYSEARCA: MDY) pushing toward a major breakout near the $570 level. This broadening market strength is helping fuel sentiment for mid-cap growth names, such as Toast.
Analyst sentiment has also turned increasingly bullish. Among 24 analysts covering the stock, 12 rate it a Buy and 12 rate it a Hold, an improvement from prior months when the consensus was a more neutral Hold. Part of the optimism is driven by improving technicals and positive earnings momentum.
On May 8, 2025, Toast reported strong Q1 earnings, beating EPS estimates and reaffirming its growth trajectory. The company delivered EPS of $0.10, representing a 167% year-over-year increase, which exceeded consensus expectations. Revenue came in at $1.34 billion, up 24.7%, in line with analyst forecasts.
Toast also reported net income of $56 million, representing a 75% quarter-over-quarter increase, and adjusted EBITDA reached $133 million, with GAAP operating income of $43 million.
In addition to the substantial headline numbers, Toast reported 31% growth in annual recurring revenue (ARR), with SaaS ARR climbing 32%. The company added over 6,000 net new locations, bringing its global total to approximately 140,000.
Notable enterprise wins during the quarter included new partnerships with Applebee’s and Topgolf. Toast also unveiled ToastIQ, its new AI-driven intelligence engine designed to enhance restaurant performance and decision-making.
The company raised its full-year 2025 outlook, projecting 26% growth in fintech and subscription gross profit and $550 million in adjusted EBITDA.
Following the report, the stock jumped nearly 20% as investors responded to the earnings beat and improved guidance.
Institutional Activity Supports the Bull Case
Institutional support has been a key factor in TOST’s strength. Over the past 12 months, $4.5 billion in institutional capital has flowed into the stock, compared to $2.4 billion in outflows.
With 82.9% of shares held by institutions, Toast continues to be a name that several funds are actively accumulating.
Watch the $45 Breakout Level
Technically, TOST is consolidating just below a key resistance area near $45. Since the post-earnings rally, the stock has spent over a month digesting gains in a tightening range. A breakout above this level could trigger another leg higher, with momentum traders potentially targeting a move toward $50.
On the downside, $42 is acting as short-term support. If the stock pulls back into that area, it may present an attractive entry point for longer-term investors looking for a favorable risk-reward setup and potential entry point.
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