Toast stock falls after software price trims; Cuts later reverted

Investing.com -- Toast Inc (NYSE:TOST) stock fell 5% Monday morning after the restaurant technology provider significantly reduced pricing for its software packages aimed at smaller restaurants, raising concerns about competitive pressures in the industry.

Later in the day, however, Baird reported that Toast’s website pricing had mostly reverted to prior levels, with the steep 26–58% trims observed in the morning no longer in effect by noon CT. In fact, two fees increased slightly: the self-service Basic Software rose about 10% to $109 per month, while the self-service Growth Software inched up 2% to $618 per month.

"We remain balanced on TOST given valuation of ~51X 2026E GAAP EPS (XYZ trading ~25X on a similar basis), and we expect some deceleration in GP growth in coming quarters as location growth and volume growth has decelerated, while SaaS ARPU comp gets much tougher in H2," the firm’s analysts said in this second note.

In its earlier morning note, the firm said the company had cut monthly fees for its "Core" and "Growth" software packages by 26-58% across most hardware types, according to Baird analysts who monitor Toast’s pricing on a weekly basis. These changes were not present in last week’s review.

For handheld and countertop hardware kits, Toast reduced its Core Software package by approximately 34% to $144 per month from $219, while the Growth Software package saw a steeper cut of about 58% to $244 per month from $578.

Self-service hardware kits saw similar reductions, with Core Software prices dropping 26% to $184 monthly from $249, and Growth Software fees decreasing 53% to $284 from $608 monthly. However, the Basic Software option for self-service hardware increased slightly by 10% to $109 per month.

The pricing changes appeared targeted at smaller restaurants that process below $1 million in annualized volume per location, which is smaller than Toast’s core customer base.