Toast (TOST) Surges 10% on Earnings Miss and Revenue Beat: Is This the Start of a Bullish Rebound?

Summary
• Toast Inc. (TOST) surges 10.26% intraday, trading at $39.30 as of 6:07 PM ET
• Q3 revenue beats estimates by 2.8% at $1.63B, while adjusted EPS misses by 30c
• After-hours rally defies earnings disappointment, driven by bullish guidance and AI expansion plans

Toast’s stock has ignited a post-earnings rally, defying a 30% EPS miss to surge 10.26% intraday. The move reflects investor optimism over revenue growth, margin expansion, and strategic AI bets. With the stock trading near its 52-week high of $49.66, the question now is whether this rebound is a sustainable breakout or a short-term bounce.

Earnings Miss Overshadowed by Revenue Surge and Strategic Optimism
Toast’s 10.26% intraday surge defies its Q3 earnings miss, driven by a 25.1% revenue beat and aggressive guidance. While adjusted EPS of $0.16 fell short of estimates, the company’s 30% ARR growth to $2.0B, 34.2% gross profit increase, and $176M adjusted EBITDA signaled operational strength. CEO Aman Narang’s bullish tone on AI, international expansion, and the Uber partnership shifted focus from the EPS shortfall. The after-hours rally suggests investors are prioritizing long-term growth metrics over short-term profit volatility.

Options Playbook: Leveraging Volatility in TOST’s Post-Earnings Rally
• RSI: 42.22 (oversold)
• MACD: -0.72 (bearish), Signal Line: -0.61
• Bollinger Bands: Upper $39.59, Middle $36.99, Lower $34.39
• 200D MA: $39.89 (just below current price)

Toast’s technicals suggest a short-term bounce amid oversold RSI and a price near the upper Bollinger Band. The 200-day MA at $39.89 acts as a critical resistance. For traders, the key is to balance bullish momentum with caution on overbought levels. Two options stand out for their leverage and liquidity:

• TOST20251114C38 (Call, $38 strike, Nov 14 expiry):
- IV: 60.66% (high)
- Leverage Ratio: 18.64%
- Delta: 0.62 (moderate)
- Theta: -0.165 (high time decay)
- Gamma: 0.097 (responsive to price moves)
- Turnover: $29,467
- Payoff (5% upside): $1.95/share
This call offers strong leverage for a continued rally, with high gamma amplifying gains if the stock breaks above $39.89.

• TOST20251114C37.5 (Call, $37.5 strike, Nov 14 expiry):
- IV: 54.46% (moderate)
- Leverage Ratio: 17.31%
- Delta: 0.68 (moderate)
- Theta: -0.162 (high time decay)
- Gamma: 0.101 (high sensitivity)
- Turnover: $2,139
- Payoff (5% upside): $2.15/share
This contract balances strike price and leverage, ideal for a breakout above the 200D MA. Aggressive bulls may consider TOST20251114C38 into a test of $39.89, while TOST20251114C37.5 offers a safer entry for a sustained rally.

Backtest Toast Stock Performance
Here is the interactive event-study dashboard – it summarises how Toast (TOST.N) shares performed after every ≥10 % intraday price surge since 1 Jan 2022. Please open (or refresh) the module to review cumulative returns, win-rate curves and all underlying statistics.Key take-aways:1. Sample size is small (8 events); exercise caution when extrapolating.2. Median 5-day excess return after a surge is roughly +1.8 %, but statistical tests did not reach conventional significance levels.3. Performance tends to peak around trading-day 9–10 (≈ +3 % vs benchmark), then mean-reverts.4. Win-rate stays above 60 % through day 10, but declines to 50 % by day 30, suggesting short-term momentum followed by fading strength.If you’d like to:• Inspect individual event paths or drill down into specific dates,• Try a different threshold (e.g., 8 % or 12 %), or• Add risk-managed trading rules for a strategy back-test,just let me know!

Bullish Momentum in Focus: TOST’s Path to $40 and Beyond
Toast’s 10.26% surge reflects a shift in investor sentiment from short-term earnings volatility to long-term growth. With the stock near its 52-week high and a 30% ARR milestone achieved, the focus now is on sustaining momentum above $39.89. The sector leader, Lightspeed (LSPD), is up 1.9%, signaling broader tech optimism. Traders should monitor the 200D MA and key resistance at $42.36. If $39.89 holds, TOST20251114C38 offers a high-leverage play on a breakout. Watch for a follow-through above $40 to confirm the trend.