TOST - Toast: Increasing My Price Target As Revenue And Margins Rise

2024-03-20 00:37:22 ET

Summary

• Toast is a cloud-based platform for the restaurant industry that has climbed 34% since my initial "Buy" rating, with further upside ahead.
• The Company is gaining traction in new restaurant locations and expanding internationally, with 43% of customers using six or more product modules, with subscription revenue growing at the fastest pace.
• TOST continues to grow its margins, and while macroeconomic uncertainty remains, the company's stock is well positioned to see further upside.

Introduction & Investment Thesis

I initiated a Buy rating on Toast ( TOST ) on January 17, 2024. Since then, the stock has climbed 34%. My buy thesis was predicated on my belief that the company should continue to see deeper market penetration as it successfully drives adoption of its product modules in restaurant locations in the US. At the same time, I was also impressed by the management's discipline to streamline operational efficiencies....

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