DA Davidson has revised down its price target for Toast Inc. (TOST) to $33 from $36 while keeping its recommendation at Neutral. The adjustment follows the firm’s review of the company’s fourth-quarter results and the initial guidance Toast supplied for fiscal 2026.
According to InvestingPro data, the new target sits within a broader analyst range that stretches from $30 to $65, and those Fair Value calculations suggest Toast may be trading at a slight discount to its theoretical valuation.
On the earnings front, Toast’s fourth-quarter performance presented a mix of outcomes against DA Davidson’s expectations. Non-GAAP FinTech & Subscription gross profit came in about 2% above the broker’s forecast, while adjusted EBITDA outpaced the firm’s projection by roughly 9%.
For the year ahead, Toast provided initial fiscal 2026 guidance that calls for 20% to 22% year-over-year growth in Non-GAAP FinTech & Subscription gross profit. The company also forecast adjusted EBITDA growth in the 22% to 26% year-over-year range.
Despite those topline and margin signals, DA Davidson trimmed its own adjusted EBITDA estimates for Toast by 2% for both 2026 and 2027 following the fourth-quarter update. The firm concluded that the stock should remain rated Neutral alongside the reduced price target.
Toast’s reported fourth-quarter earnings for 2025 showed additional contrasts in the company’s results. Earnings per share came in at $0.16, below the $0.24 analysts had forecast, representing a negative surprise of 33.33%. Revenue nevertheless exceeded expectations, with Toast reporting $1.63 billion versus the $1.62 billion consensus.
Market analysts outside DA Davidson have also taken varied actions. Needham trimmed its price target from $60 to $35 but retained a Buy rating, citing robust location additions and growth in average revenue per user. In contrast, Bernstein SocGen Group upgraded the stock to Outperform and kept a $39 price target. Bernstein SocGen analyst Harshita Rawat pointed to the stock’s decline over the past year, attributing it to a de-rating in the software and fintech sectors and to competitive concerns.
These divergent analyst responses underscore mixed sentiment about Toast’s near-term trajectory: some brokers emphasize growth in locations and revenue per user, while others remain cautious about sector pressure and competition. For now, DA Davidson’s move narrows the firm’s valuation view while keeping its stance neutral.
Key takeaways and context are summarized below.