Bank of America Initiates Coverage on Toast (NYSE:TOST)

Key Points

• Bank of America initiated coverage of Toast with a Buy rating and a $40 price target, implying approximately 30% upside from the prior close.
• Analyst sentiment is broadly positive: 17 analysts rate Toast a Buy and 11 rate it a Hold, producing a consensus rating of “Moderate Buy” and an average target of $39.15.
• Toast shares rose 3.0% to $30.74, while the company reported 23.1% year-over-year revenue growth in its latest quarter but missed consensus EPS estimates.

Equities researchers at Bank of America started coverage on shares of Toast (NYSE:TOST - Get Free Report) in a note issued to investors on Thursday. The brokerage set a "buy" rating and a $40.00 price target on the stock. Bank of America's price objective would indicate a potential upside of 30.12% from the company's previous close.

TOST has been the subject of a number of other reports. DA Davidson boosted their price objective on shares of Toast from $30.00 to $34.00 and gave the stock a "neutral" rating in a report on Monday, August 10th. Royal Bank Of Canada lifted their target price on Toast from $36.00 to $44.00 and gave the stock a "sector perform" rating in a report on Monday, August 31st. Sanford C. Bernstein boosted their price target on Toast from $39.00 to $45.00 and gave the stock an "outperform" rating in a research note on Thursday, August 6th. Weiss Ratings upgraded Toast from a "hold (c)" rating to a "hold (c+)" rating in a research note on Thursday, October 8th. Finally, BMO Capital Markets upped their price target on Toast from $35.00 to $40.00 and gave the company an "outperform" rating in a report on Wednesday, August 5th. Seventeen investment analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $39.15.

Toast Trading Up 3.0%

NYSE:TOST traded up $0.89 on Thursday, reaching $30.74. 380,995 shares of the stock traded hands, compared to its average volume of 10,965,396. The company has a market capitalization of $15.80 billion, a price-to-earnings ratio of 39.19 and a beta of 1.74. Toast has a 12 month low of $22.26 and a 12 month high of $39.72. The company's fifty day simple moving average is $32.70 and its 200 day simple moving average is $29.15.

Toast (NYSE:TOST - Get Free Report) last issued its earnings results on Tuesday, August 4th. The company reported $0.26 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.32 by ($0.06). Toast had a return on equity of 23.90% and a net margin of 7.14%. The firm had revenue of $1.91 billion during the quarter, compared to the consensus estimate of $1.87 billion. During the same quarter in the prior year, the company posted $0.13 EPS. The company's quarterly revenue was up 23.1% on a year-over-year basis. Equities analysts anticipate that Toast will post 1.00 EPS for the current fiscal year.

Insiders Place Their Bets

In other Toast news, CEO Aman Narang sold 14,713 shares of the stock in a transaction dated Friday, October 2nd. The stock was sold at an average price of $29.35, for a total value of $431,826.55. Following the transaction, the chief executive officer owned 86,543 shares of the company's stock, valued at approximately $2,540,037.05. This represents a 14.53% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, General Counsel Brian R. Elworthy sold 6,507 shares of the firm's stock in a transaction dated Friday, October 2nd. The stock was sold at an average price of $29.35, for a total value of $190,980.45. Following the completion of the transaction, the general counsel directly owned 204,023 shares in the company, valued at $5,988,075.05. The trade was a 3.09% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 534,830 shares of company stock worth $18,566,600 in the last 90 days. Insiders own 10.03% of the company's stock.

Hedge Funds Weigh In On Toast

Institutional investors have recently made changes to their positions in the business. Principal Financial Group Inc. lifted its holdings in shares of Toast by 36.0% in the 1st quarter. Principal Financial Group Inc. now owns 7,977,244 shares of the company's stock valued at $211,478,000 after acquiring an additional 2,111,009 shares during the last quarter. Bank of America Corp DE grew its position in Toast by 10.6% in the first quarter. Bank of America Corp DE now owns 4,866,197 shares of the company's stock worth $129,003,000 after acquiring an additional 465,006 shares in the last quarter. Renaissance Technologies LLC increased its stake in Toast by 25.1% during the first quarter. Renaissance Technologies LLC now owns 4,321,437 shares of the company's stock worth $114,561,000 after acquiring an additional 867,509 shares during the last quarter. Amova Asset Management Americas Inc. increased its stake in Toast by 0.4% during the first quarter. Amova Asset Management Americas Inc. now owns 3,817,961 shares of the company's stock worth $101,176,000 after acquiring an additional 16,614 shares during the last quarter. Finally, Amundi increased its stake in Toast by 24.5% during the first quarter. Amundi now owns 3,329,206 shares of the company's stock worth $88,257,000 after acquiring an additional 655,717 shares during the last quarter. Institutional investors own 82.91% of the company's stock.

About Toast

Toast, Inc NYSE: TOST provides a cloud-based technology platform designed for restaurants and other foodservice businesses. Its platform combines point-of-sale hardware and software with tools for payment processing, menu and order management, employee operations, inventory, reporting and customer engagement.

The company's products and services support in-restaurant, online and delivery orders, as well as gift cards, loyalty programs, marketing and payroll-related functions. Toast also offers restaurant-specific hardware, including terminals, handheld devices, kitchen display systems and self-service kiosks, allowing businesses to manage operations through an integrated technology ecosystem.

Founded in 2011 and headquartered in Boston, Toast initially focused on helping restaurants replace traditional point-of-sale systems with cloud-based technology.

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