Head to Head Contrast: Toast (NYSE:TOST) and Workday (NASDAQ:WDAY)

Workday (NASDAQ:WDAYGet Rating) and Toast (NYSE:TOSTGet Rating) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Insider & Institutional Ownership

68.2% of Workday shares are owned by institutional investors. Comparatively, 45.7% of Toast shares are owned by institutional investors. 21.7% of Workday shares are owned by company insiders. Comparatively, 20.2% of Toast shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Workday and Toast, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Workday 1 5 24 0 2.77
Toast 1 7 8 0 2.44

Workday presently has a consensus target price of $240.23, suggesting a potential upside of 59.63%. Toast has a consensus target price of $27.30, suggesting a potential upside of 53.63%. Given Workday’s stronger consensus rating and higher probable upside, equities analysts plainly believe Workday is more favorable than Toast.

Profitability

This table compares Workday and Toast’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Workday -3.46% -2.34% -0.95%
Toast -14.83% -22.50% -14.38%

Valuation & Earnings

This table compares Workday and Toast’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Workday $5.14 billion 7.50 $29.37 million ($0.78) -192.94
Toast $1.71 billion 5.33 -$487.00 million ($1.59) -11.18

Workday has higher revenue and earnings than Toast. Workday is trading at a lower price-to-earnings ratio than Toast, indicating that it is currently the more affordable of the two stocks.

Summary

Workday beats Toast on 12 of the 13 factors compared between the two stocks.

About Workday

(Get Rating)

Workday, Inc. provides enterprise cloud applications in the United States and internationally. The company's applications help its customers to plan, execute, analyze, and extend to other applications and environments, and to manage their business and operations. It offers a suite of financial management applications, which enable chief financial officers to maintain accounting information in the general ledger; manage financial processes; identify real-time financial, operational, and management insights; enhance financial consolidation; reduce time-to-close; promote internal control and auditability; and achieve consistency across finance operations. The company also provides cloud spend management solutions that helps organizations to streamline supplier selection and contracts, manage indirect spend, and build and execute sourcing events, such as requests for proposals; Human Capital Management (HCM) solution, a suite of human capital management applications that allows organizations to manage the entire employee lifecycle from recruitment to retirement, and enables HR teams to hire, onboard, pay, develop, reskill, and provide employee experiences; Workday applications for planning; and applications for analytics and reporting, including augmented analytics to surface insights to the line of business in simple-to-understand stories, machine learning to drive efficiency and automation, and benchmarks to compare performance against other companies. It serves professional and business services, financial services, healthcare, education, government, technology, media, retail, and hospitality industries. The company was formerly known as North Tahoe Power Tools, Inc. and changed its name to Workday, Inc. in July 2005. Workday, Inc. was incorporated in 2005 and is headquartered in Pleasanton, California.

About Toast

(Get Rating)

Toast, Inc. operates a cloud-based and digital technology platform for the restaurant industry in the United States and Ireland. The company offers Toast Point of Sale (POS), a hardware product; Toast Order & Pay, which allows guests to order and pay from their mobile devices; Toast Flex that is used for on-counter order and pay, as well as used as a server station, guest kiosk, kitchen display system, or order fulfillment station; Toast Go, a handheld POS device that enhances the table turn times through tableside ordering and payment acceptance; and Toast Tap, a card reader. It also provides kitchen display system software that connects the front of the house with the kitchen staff; multi-location management software, which allows customers to manage and standardize their operations and configure menus; xtraCHEF that provides back-office tools; and Toast Flex for Kitchen, a larger format mountable piece of hardware that can be used as a kitchen screen. In addition, the company offers Toast Online Ordering & Toast TakeOut app, a software-based platform that provides restaurants to take off-premises orders directly through their branded website; First-Party Delivery services for restaurants to manage a fleet of drivers, and customize delivery hours, zones, fees, and minimum ticket sizes; Toast Delivery Services, which enables restaurants to utilize a partner network of delivery drivers; and Toast Delivery Partners services. Further, it provides loyalty programs and gift cards; payroll and team management products; business owner policy insurance and restaurant-specific add-ons; payment processing solutions; loans advanced to restaurants; purchase financing; reporting and analytics solutions; Toast Partner Connect that allows customers to discover, select, and connect their restaurant to its partners; and bi-directional APIs. The company was incorporated in 2011 and is headquartered in Boston, Massachusetts.

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