TOST - Toast: Strong Q1 Earnings Raising Price Target As Management Delivers

2024-05-08 17:31:31 ET

Summary

• Toast's Q1 FY24 earnings report exceeded expectations, with revenue growing 31% YoY and Subscription revenue growing 41% YoY, along with an Adjusted EBITDA margin of 0.53%.
• The company is focused on expanding its restaurant locations and driving adoption of its product modules through upselling and product innovation.
• While a global macroeconomic slowdown and international expansion pose risks, Toast has raised its guidance and shows potential for long-term growth.
• I am raising my price target since my last coverage to $36, making it a “buy” at current levels.

Introduction & Investment Thesis

I last covered Toast, Inc. ( TOST ) on March 20, where I increased my price target for the stock. Since then, TOST is up 13.91% and has climbed 59% since my first coverage on January 17. My bullish thesis on Toast was predicated on my belief that the company will continue to drive market penetration as it opens new restaurant locations and sees deeper adoption of its product modules by successfully leveraging its upsell team along with robust product innovation....

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