From Nasdaq Inc.:

When Toast (NYSE: TOST) went public, the bull believed it would revolutionize the restaurant industry but today, the stock is trading at about $16, a significant decrease from its all-time high. The company serves restaurants with point-of-sale payment systems, generating most of its revenue from payment processing fees and expects 40-41% growth to $3.83 billion-$3.86 billion in 2023. Despite rapid growth, Toast continues to rely on payment processing fees and remains unprofitable on a GAAP basis for the foreseeable future. Leo Sun has positions in Adyen. The Motley Fool has positions in and recommends Adyen, Block, PayPal, Shopify, and Toast.

Toast’s all-in-one solution for restaurants makes it an easy way for restaurants to digitally transform their businesses and lock in their customers. Toast’s platform can be integrated with Shopify, and Shopify’s sales are expected to reach $10.03 billion while Toast’s are expected to reach $5.95 billion. Toast will struggle to compete with heavyweight cloud platform providers and probably won’t become the next Shopify.

Toast’s long-term growth will depend on its ability to stay ahead of the competition and scale its higher-margin subscription business. Its reliance on the restaurant industry could expose it to tougher macro headwinds, and it might have difficulty in scaling its business enough to dilute its costs. Toast still needs to break out of its niche without breaking the bank.

Should you invest in Toast right now? Before you buy stock in Toast, consider this- “The 10 best stocks for investors to buy now… and Toast wasn’t one of them. ”



Read more: Could Toast Become the Next Shopify?