Toast stock jumps on Q1 earnings beat

Shares of Toast (TOST) are skyrocketing after the company's first quarter earnings report surpassed expectations. The software company's EBITDA beat estimates by 142%, signaling continued costumer strength. Yahoo Finance's Madison Mills offers insights into what these financial results reveal about the state of the consumer.

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This post was written by Angel Smith

Video transcript

Well, you've seen it in restaurants.When you're paying your bill toast.We're not talking about the bread.We're talking about the Cloud based restaurant software company Toast reported earnings that beat Wall Street expectations.And guess what?It's top trending ticker on Yahoo Finance For more on what the results say about the consumer, we have Yahoo Finance's Madison Mills.Hey, Maddie, did you like that toast intro?I just for you?We did that just for you.I mean, you know, I order a croissant, bacon, egg and cheese every day, but we'll go with toast right now.Well, it's interesting because I know the last guest was talking about how they maybe is used to kind of save money for the business, and then they can pass that on to consumers.But when you look at these toast earnings, I get an indication of the complete opposite story I get.I see a picture of restaurants that are utilising something like tipping to be able to keep profits strong.There is evidence of that In this toast earnings print.We saw 100 and 42% I a beat that is telling me that restaurants are doing really well, but just to back it up for anyone who's not familiar if you have not seen toast before, this is the P OS system that restaurants are using for things like your apple pay.For example, if you have a waiter, come over to your table with a little credit card looking machine, you can look for that toast logo.My boyfriend and I are obsessed with this because we're nerds, so we're constantly looking to see what P OS our restaurants are using.A lot of the times it's toast.Uh, you can also use this product to do things like change up the menus.They have a kitchen option they can use.You can see on your screen what I'm talking about here.Uh, and also it can be used as a reservation tool for restaurants as well.So what's interesting in this earnings sprint again?Huge growth for the company.We saw several, uh, folks coming out of across the street raising their price targets for toast following these earnings.Uh, and again, what I think is interesting for the consumer to look at is the profit gain that indicates to me that restaurants are doing well, which could be an indication that the consumer they're still eating out.I mean, I like it because I think I collect points whenever I eat at a place that does have toast or one of the it's it's either to one of the competitors here.I mean, at the end of the day, the pandemic has completely reshaped the dining experiences and for the point of sale systems that we have just become accustomed to.At this point, toast has cemented themselves.It was a question of whether or not they would be able to retain the same type of merchant or client base that they had in the immediate kind of receding of the height of the or the crest of the pandemic.It's a great point, Brad, because also they have one of one of the products that they offer is the one where you can kind of do the ordering yourself.And a lot of restaurants were using that and picking up on that product during the pandemic.So they did have some struggles during covid, they instituted a restructuring.They recently did another one that is weighing on their profits a little bit still, but I would love for every restaurant to let me just order.I don't I don't like talking to people what I have to order the first I mean, one of my first jobs was a waiter, so I get nervous.It's not the waiter, it's I also wasn't good at it.