DA Davidson has reduced its price target for Toast Inc. (NYSE:TOST) to $36.00 from $42.00, while maintaining a Neutral rating on the stock, the firm said in a note released Monday. The revised target arrives as Toast shares trade around $31.94, a level that represents a 33.33% decline over the past six months.
The research house pointed to recent downward pressure on peer multiples as the primary rationale for the trimmed target. The firm highlighted Toast's elevated valuation-even after the cut-by noting the company currently trades at a P/E ratio of 74.68, underscoring a high earnings multiple relative to comparable companies.
Looking ahead to earnings, DA Davidson expects Toast to modestly top consensus when it reports fourth-quarter results after market close on Thursday, February 12, 2026. However, the analyst cautioned that year-over-year growth and margin expansion should be more moderate than what the company has delivered over the last four to six quarters.
For the fourth quarter specifically, DA Davidson models Non-GAAP FinTech & Subscription gross profit of $491 million, which would represent 25% year-over-year growth. That forecast is essentially in line with consensus, which sits at $492 million.
Toast's own quarterly guidance had targeted 22% to 25% year-over-year growth in this metric, implying results between $480 million and $490 million. DA Davidson added that management is expected to provide initial 2026 financial guidance ranges at the report, and that those ranges will likely bracket consensus estimates.
Other broker commentary and corporate developments provide a mixed backdrop for the report. Truist Securities has noted a recent quarter in which Toast beat on recurring gross profit by about 7%. UBS has reiterated a Buy rating with a $50 price target, citing the company's payments strategy, while also noting that Toast's core payments net take rate is currently lower than some peers. Evercore ISI upgraded the stock to Outperform, emphasizing Toast's competitive position and the positive contribution of price increases to growth.
Not all recent analyst action has been favorable. Wolfe Research lowered its rating to Peerperform, pointing to intensifying competition in the restaurant point-of-sale market and the higher level of investment that this competition is prompting at Toast.
On the corporate leadership front, Toast announced the appointment of Rossana Niola as its new chief accounting officer, effective in early 2026. Niola joins Toast following leadership roles at Mastercard, Inc., bringing experience in financial operations to the role.
As Toast approaches its quarterly report, investors will be watching whether the company can meet or slightly exceed near-term expectations while navigating a competitive landscape, elevated valuation multiples, and the guidance it provides for fiscal 2026.
Contextual note: The information above reflects analyst estimates, company guidance, and recent broker commentary as presented in the research note and related reports.