Toast Surges 5.66% on IBD 50 Inclusion and Earnings Anticipation Despite Modest $0.4B Volume Rank 267th

On August 4, 2025, Toast (TOST) surged 5.66% with a trading volume of $0.40 billion, ranking 267th in market activity. The stock rebounded sharply from a prior session’s selloff, driven by its inclusion in the IBD 50 Growth Stocks To Watch list and anticipation of its upcoming earnings report. Analysts highlight expectations for a significant earnings beat, with consensus forecasts pointing to 24 cents per share for Q2 2025, a notable increase from the 2 cents reported in the prior-year quarter.

Technical indicators suggest a bullish short-term outlook. Toast’s price approached its 52-week high of $49.36, with RSI at 63.25 and MACD signaling a bullish divergence. Options volatility spiked ahead of the August 8 expiry, with aggressive positioning in call options reflecting investor confidence. The stock’s 12.9% gain over the past six months outperformed broader tech indices, though valuations remain stretched, with a price-to-book ratio of 13.89X compared to the industry average of 6.74X.

Key growth drivers include strong subscription and fintech gross profit growth, with management projecting 26-29% year-over-year expansion. Toast’s AI-powered tools, such as Sous Chef and ToastIQ, have shown tangible benefits for partners, including a 10x return on ad spend for Felipe’s Taqueria. However, macroeconomic risks—such as consumer spending shifts and labor inflation—remain a concern, as the restaurant sector is highly sensitive to economic fluctuations.

The backtest of TOST’s performance following a 6% intraday surge revealed mixed outcomes. While a 5.40% peak return occurred on day 59, the strategy showed a low win rate for 3-day, 10-day, and 30-day periods, with returns of -0.08%, 0.88%, and 1.95% respectively. This underscores the stock’s volatility and the limited likelihood of sustained gains after sharp short-term rallies.