William Blair analyst Stephen Sheldon has reiterated their bullish stance on TOST stock, giving a Buy rating today.
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Stephen Sheldon has given his Buy rating due to a combination of factors that highlight Toast Inc’s strong performance and promising outlook. Despite facing challenges in the restaurant industry, Toast exceeded expectations in the third quarter, showing impressive growth in revenue, profit, and new location additions. The company’s revenue increased by 25% year-over-year, while its annual recurring revenue (ARR) grew by 30%, aligning with estimates. Additionally, Toast’s non-GAAP SaaS and fintech gross profit surged by 34%, surpassing the high end of guidance expectations.
Toast’s strategic growth initiatives and robust financial performance further support the Buy rating. The company added 7,500 net new locations and maintained stable gross payment volume per location, which is notable in the current economic environment. Furthermore, Toast achieved a 5% increase in SaaS average revenue per user (ARPU) and improved its payment take-rates and gross margins. With an adjusted EBITDA growth of 56% and free cash flow rising significantly, Toast’s management has raised its guidance for 2025, projecting substantial growth in core gross profit and adjusted EBITDA. These factors collectively indicate a strong potential for continued success, justifying the Buy recommendation.
Sheldon covers the Real Estate sector, focusing on stocks such as CBRE Group, CoStar Group, and Real Brokerage. According to TipRanks, Sheldon has an average return of -0.5% and a 40.34% success rate on recommended stocks.
In another report released today, Needham also reiterated a Buy rating on the stock with a $60.00 price target.