Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Toast, Inc. (TOST) on Denis Gorbunov's Substack. In this article, we will summarize the bulls’ thesis on TOST. Toast, Inc. (TOST)'s share was trading at $43.45 as of 9th June. TOST’s trailing and forward P/E were 163 and 47.85 respectively according to Yahoo Finance.
The front counter of the restaurant, with the menu illuminated in the background.
Toast (TOST) is emerging as a mission-critical platform for restaurants by offering a vertically integrated suite of hardware, software, and payment solutions designed specifically for the food service industry. With restaurant operations spanning a wide range of complex functions—from payroll and inventory to takeout logistics and marketing—Toast provides a unified system that streamlines these workflows.
Unlike many competitors, it develops its technology stack, enabling seamless integration across services and avoiding dependence on third-party providers. As of June 2025, the company supports 140,000 restaurants across formats, from quick-service outlets to fine dining venues. Its AI-enhanced tools help restaurants drive sales by recommending order upgrades and optimizing efficiency, further reinforcing the stickiness of the platform.
Financially, Toast continues to scale with discipline: revenue rose 27% year-over-year, free cash flow reached $69 million in Q1 2025, and it maintains a debt-free balance sheet. The company’s three-pronged revenue model—software subscriptions, payment processing fees, and hardware sales—ensures a steady mix of recurring and growth-oriented income. While hardware is the smallest contributor, it plays a vital role in client onboarding, embedding restaurants into Toast’s ecosystem and driving retention.
The increasing institutional interest in Toast shares last quarter signals growing confidence in the company's trajectory and resilience. With robust financial health, a deeply embedded value proposition, and a platform designed to address the unique pain points of restaurant operators, Toast presents a compelling long-term opportunity. Its ability to combine growth, profitability, and product depth positions it uniquely in a sector that demands both technological sophistication and operational reliability.
Previously, we highlighted a bullish thesis on Toast, Inc. (TOST) from Nikhs on Substack in March 2025, emphasizing its evolution into a profitable, vertically integrated restaurant-tech leader. With 134,000 locations, $1.34 billion in revenue, and expanding margins, the thesis framed Toast as a high-quality compounder with a defensible moat and strong AI-driven product adoption. The stock has appreciated by roughly 21% since then.
Toast, Inc. (TOST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held TOST at the end of the first quarter which was 63 in the previous quarter. While we acknowledge the risk and potential of TOST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
