Wolfe Research confirmed a Peerperform rating on Toast Inc. (TOST) and removed the firm’s earlier price target for the restaurant technology company, while simultaneously adjusting its forward valuation band. The research note cites a favorable tactical setup into the company’s fourth-quarter earnings, and maintains that the near-term backdrop could allow Toast to deliver what the firm characterizes as "healthy results."
The analyst team led by Darrin Peller pointed to a broader trend of software-exposed names underperforming amid concerns about disruption from artificial intelligence - a dynamic Wolfe believes is overstated in Toast’s case. The firm’s commentary frames the immediate earnings window as having a lower bar for the company to clear, which underpins their neutral Peerperform stance heading into the report.
On valuation, Wolfe Research trimmed its year-end 2026 fair value range for Toast to $31-$34, down from a prior $40-$44 range. That reduction is predicated on applying a multiple of approximately 17-18 times Wolfe’s calendar year 2027 adjusted EBITDA estimate of $1,024 million. The firm’s updated range aligns with InvestingPro’s Fair Value assessment, which the research note indicates still points to the stock as undervalued on that basis despite elevated earnings multiples.
Market performance has weighed on the shares. Toast stock is down 22% year-to-date, a drop that contrasts with the S&P 500’s 1% gain and is slightly worse than the Wolfe FinTech Index’s 10% decline, according to the research firm's analysis. The company’s trailing profitability remains positive over the prior year, with diluted EPS of $0.43 over the last twelve months.
Analyst coverage and corporate developments have been active in recent weeks. Evercore ISI upgraded the company to Outperform with a $40 price target, citing Toast’s competitive position and operational leverage. In contrast, Wolfe Research’s move to Peerperform reflected caution around intensifying competition in the restaurant point-of-sale market. DA Davidson trimmed its price target to $36 while keeping a Neutral rating, attributing that stance in part to pressure on peer multiples. UBS reiterated a Buy rating and set a $50 target, highlighting Toast’s payments strategy and noting a core payments net take rate of approximately 50 basis points.
On the corporate front, Toast announced an accounting leadership change, appointing Rossana Niola as chief accounting officer effective in early 2026. Niola, who most recently held leadership roles at Mastercard, will also serve as principal accounting officer upon her start. The move is presented alongside the analyst activity as part of a series of strategic adjustments and leadership changes within the company.
Taken together, the analyst actions reflect divergent views on Toast’s competitive positioning, payments economics and the appropriate multiple to assign to near-term adjusted EBITDA. Wolfe Research’s revised fair value band and its decision to remove a price target signal a more conservative long-range valuation framework, even as the firm highlights a potentially favorable short-term earnings setup.
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