Is This Growth Stock on Discount Right Now?

Photo of author
Written By Faith Boluwatife

Since its peak in late 2021, shares of Toast (TOST) have witnessed a staggering 74% plunge. However, this decline should not be misconstrued as a sign of failure.

Instead, it represents a unique opportunity for astute investors to capitalize on the potential of this restaurant management software specialist.

Read More: Does Dividend Investing Make Sense?

The Multifaceted Platform of Toast

Toast is akin to a Swiss Army knife for the restaurant industry, offering a comprehensive range of services. Its cloud-based platform caters to an array of establishments, from small cafes to local bar chains, providing essential tools needed for efficient operation.

This platform integrates various functionalities that were traditionally managed by disparate software and manual methods, creating a seamless ecosystem for restaurant management.

Credit: DepositPhotos

The system’s interconnected nature allows for the smooth flow of information across different departments.

For example, it can align inventory management with customer service, enabling servers to adapt their recommendations based on real-time stock levels.

Beyond merely tracking data, Toast’s platform makes it actionable across all sections of a restaurant, enhancing operational efficiency.

Understanding Investor Hesitations and Toast’s Growth Strategy

Investors may be hesitant about Toast due to its current lack of profits and minimal cash flows.

This hesitance is reflected in the stock’s significant drop, including a 25% fall in the last six months.

However, it’s crucial to recognize that Toast is playing the long game, typical of growth stocks in the tech sector.

The company is consciously prioritizing rapid expansion and market penetration over immediate profitability, a strategy often employed in consumer-focused industries.

This approach involves selling hardware at a loss, a tactic designed to attract cost-conscious restaurants.

While this explains the negative profits, it’s a strategic move to build a substantial customer base, with the aim of transitioning to profitability in the future.

Also Read: 10 Considerations Before Buying Stock of a Company

Innovative Marketing and Expansion Strategies

Toast’s expansion strategy involves innovative marketing techniques, including focusing on specific geographic areas to generate buzz and word-of-mouth referrals.

This low-cost marketing approach has proven effective, as evidenced by the company’s substantial growth in clientele and revenue.

Currently, Toast serves about 100,000 locations, a significant increase from 74,000 a year prior.

This expansion aligns with a 37% increase in revenue and a 34% rise in gross payment volumes in their payment-processing system, reaching an impressive $33.7 billion.

The Bigger Picture and Future Outlook

Despite the daunting 74% drop from its IPO highs, Toast presents a ripe opportunity for forward-thinking investors.

Credit: DepositPhotos

The company’s American-centric business model has been successful, though it hasn’t ventured into international markets yet. The stock’s current valuation, seemingly priced for disaster, overlooks the company’s controlled growth strategy and its potential for future expansion.

Challenges and Prospects for Toast

While there are challenges ahead, including adapting its solutions for larger-scale operations and managing public perception, Toast’s growth trajectory suggests a promising future.

Last fall’s backlash over a new fee for online orders highlighted the importance of maintaining a positive market reputation, a critical factor for the company’s continued growth.

In conclusion, Toast’s expansion in locations and revenue, coupled with its innovative approach to restaurant management, makes it a compelling choice for investors who can look past short-term market fluctuations and focus on the company’s long-term potential.

With its strategic growth plan and expanding market reach, Toast is poised to be a notable player in the tech and consumer sectors.

Read Next: Is Tesla Stock a Buy Right Now?


You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.

The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at; the Financial Industry Regulatory Authority (the "FINRA") at, and relevant State Securities Administrator website and the OTC Markets website at The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.

The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.

By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: and

By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.