Is Toast Stock a Buy After a Record 9,500-Restaurant Quarter?

Toast (NYSE: TOST), a fast-growing digital restaurant platform, experienced record growth in the second quarter of 2026, adding 9,500 new locations, bringing its total to 180,000. The company has reported consistent sales growth since its inception, with annualized recurring run rate (ARR) serving as its top-line metric. Toast reported positive net income last year, and profits have been increasing since then.

In the past, SaaS stocks faced challenges from artificial intelligence (AI) taking over tasks previously handled by humans. However, Toast has embraced AI, using data analytics and AI agents to enhance its platform and provide greater value to clients. CEO Aman Narang highlighted that clients were still too busy to optimize the platform fully, leading them to outsource tasks like payroll and marketing. Now, AI agents on the platform enable clients to maximize its capabilities.

Toast's stock trades at 41 times trailing-12-month earnings and 19 times forward one-year earnings, indicating an expected increase in earnings. The stock hit an all-time low P/E ratio before the second-quarter report, causing the market to perceive it as oversold. The current valuation suggests that Toast is not a bargain, but it is a well-run company with long-term growth potential, making a small position advisable for risk-tolerant investors.

The Motley Fool's Stock Advisor analyst team identified Toast among the 10 best stocks for investors to buy now, citing its long-term growth prospects and the potential for significant returns in the coming years. However, the article notes that Toast was not included in the top 10 list, emphasizing the importance of considering alternative investment opportunities.