Analyst David Koning of Robert W. Baird maintained a Hold rating on Toast Inc (TOST – Research Report), boosting the price target to $42.00.
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David Koning has given his Hold rating due to a combination of factors that reflect both positive and negative aspects of Toast Inc’s performance. On the positive side, the company reported strong Q1 results with significant growth in recurring gross profit and EBITDA, which exceeded expectations. The company’s guidance for 2025 has been raised, and there are notable wins with clients like Applebee’s and TopGolf, which are expected to be implemented over the next 18 months.
However, there are some concerns that temper the enthusiasm. The slight misses in location and volume metrics suggest a potential slowdown in growth, possibly due to the law of large numbers. Additionally, there are challenges anticipated in the second half of 2025, such as tougher comparisons for SaaS ARPU and a likely deceleration in recurring gross profit growth. These mixed signals contribute to the Hold rating, indicating that while the company has strong potential, there are risks that investors should consider.
According to TipRanks, Koning is a 5-star analyst with an average return of 13.8% and a 55.47% success rate. Koning covers the Technology sector, focusing on stocks such as Paymentus Holdings, AvidXchange Holdings, and Block.