Toast to Report Q4 Earnings: What's in Store for the Stock?

Core Viewpoint - Toast Inc. is expected to report strong fourth-quarter 2024 results, with significant year-over-year growth in both earnings and revenues, driven by strategic expansions and new product offerings [2][4][5]. Financial Performance - The Zacks Consensus Estimate for Toast's fourth-quarter 2024 earnings is 6 cents per share, reflecting a year-over-year increase of 185.71% [2]. - The estimated revenues for the same quarter are $1.31 billion, indicating a year-over-year growth of 26.61% [2]. Growth Drivers - Toast's performance is anticipated to benefit from location additions and international expansion, enhancing its market share in the restaurant technology sector [4]. - New features such as Electronic Benefit Transfer and Supplemental Nutrition Assistance Program payments are likely to attract more customers from the convenience store sector [4]. - The launch of the Branded App for iOS and Android, which supports various customer engagement features, is expected to contribute positively to revenue growth [5]. - The strength in renewal rates of Toast's software-as-a-service solution, driven by its subscription model and increasing repeat customers, is likely to boost annual recurring revenues (ARR) [5]. Challenges - The rapid expansion of Toast's total addressable market may have led to increased sales and marketing expenses, potentially impacting profitability [6]. - Ongoing macroeconomic pressures are likely to keep customer churn rates high among smaller restaurants due to rising costs and wage pressures [6]. Earnings Prediction - Current analysis indicates that Toast does not have a conclusive prediction for an earnings beat this season, with an Earnings ESP of -14.89% and a Zacks Rank of 3 (Hold) [7].