Goldman Sachs upgraded Toast to Buy from Neutral with a $24 price target. Investor sentiment remains very negative, as weaker average revenue per user and gross payment volume trends have dominated investor conversations, the analyst tells investors in a research note. However, the firm believes this is “very well-telegraphed,” and notes the stock’s short interest remains elevated. Goldman thinks the market is not accounting for what it expects to be materially better profitability trends in 2024 for Toast. It believes Toast could reach GAAP profitability in 2025, using conservative revenue assumptions if it can keep fixed cost growth to 10%.
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