BMO Capital Markets has recently initiated coverage of Toast Inc. (NYSE: TOST) with an encouraging “outperform” rating and a target price of $45. This recommendation reflects a strong belief in Toast’s evolving role within the U.S. restaurant technology and payments landscape. The restaurant industry is notoriously competitive and complex, yet Toast has successfully carved out a substantial niche. With a current market share estimated at around 14%, the company has ample room for expansion, particularly since the vast U.S. landscape hosts approximately 875,000 restaurants—many still reliant on outdated systems. This presents Toast with a golden opportunity to modernize operations within the sector.
At the core of Toast’s appeal is its comprehensive product suite, which not only addresses immediate point-of-sale needs but also integrates various technological solutions that streamline operational efficiencies. BMO analysts have noted that Toast’s effective go-to-market strategy is a major contributor to its favorable unit economics. One significant aspect of its model is the impressive lifetime value to customer acquisition cost (LTV/CAC) ratio, reported to exceed 6x. This highlights the firm’s ability to attract and retain customers efficiently, which is essential for long-term sustainability in a highly competitive market.
While Toast has solidified its presence in the U.S., its international ambitions are just beginning to unfold. The potential expansion into markets such as Canada, the U.K., and Ireland introduces approximately 280,000 additional locations into its addressable market. This international foothold could diversify revenue streams and mitigate risks associated with a singular market reliance. As Toast ventures into these territories, its innovative solutions could meet the demand for modernization in a similarly antiquated international restaurant sector.
Despite some economic headwinds affecting the payments industry as a whole, including pressures on gross payment volumes, BMO predicts that Toast will either maintain or improve its profitability metrics. The firm forecasts a 2026 EBITDA sitting about 5% above consensus estimates, which indicates potential for substantial upside. Given the challenging financial landscape that many technology-driven entities face, Toast’s ability to maintain strong unit economics places it in a favorable position relative to its peers.
With a target price rooted in a 34-times earnings valuation for 2026, BMO’s analysts believe this premium is warranted by Toast’s robust projected earnings growth of 34% in 2027. Moreover, the analysts have highlighted that current market dips—in this case, a 15% pullback in stock price—represent an attractive entry point for investors. This pullback, juxtaposed with a carefully managed EBITDA guidance for 2025, suggests that investors may benefit from market corrections, provided that the firm can deliver on its promises.
Toast Inc. appears poised for significant growth within both the domestic and international markets. Its sophisticated product offerings, strategic planning, and strong unit economics empower it to navigate the inherent challenges of the restaurant technology sector successfully. For investors considering options in this space, Toast represents not merely a technology provider but a potential long-term growth story backed by solid analyst confidence.