Toast (NYSE:TOST) Shares Gap Down Following Weak Earnings

Key Points

• Toast, Inc. shares experienced a gap down opening at $44.08 following a quarterly earnings report that missed expectations, reporting $0.13 EPS versus the consensus estimate of $0.23.
• The company saw a year-over-year revenue increase of 24.8%, reaching $1.55 billion, which slightly surpassed analyst expectations.
• Analysts have mixed ratings for Toast, with the stock receiving a consensus rating of "Moderate Buy" and an average target price of $44.33 following recent adjustments from various firms.

Toast, Inc. (NYSE:TOST - Get Free Report) shares gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $47.71, but opened at $44.08. Toast shares last traded at $43.98, with a volume of 4,602,397 shares.

The company reported $0.13 earnings per share for the quarter, missing the consensus estimate of $0.23 by ($0.10). The company had revenue of $1.55 billion during the quarter, compared to analysts' expectations of $1.52 billion. Toast had a return on equity of 11.01% and a net margin of 3.04%. Toast's quarterly revenue was up 24.8% on a year-over-year basis. During the same period in the previous year, the company earned $0.02 EPS.

Wall Street Analyst Weigh In

TOST has been the subject of a number of analyst reports. Keefe, Bruyette & Woods increased their price target on Toast from $47.00 to $50.00 and gave the company a "market perform" rating in a report on Wednesday. Jefferies Financial Group increased their price target on Toast from $50.00 to $54.00 and gave the company a "buy" rating in a report on Friday, July 18th. Wall Street Zen downgraded Toast from a "buy" rating to a "hold" rating in a report on Saturday, July 5th. Wells Fargo & Company assumed coverage on Toast in a report on Wednesday, July 16th. They issued a "buy" rating for the company. Finally, DA Davidson upped their price objective on Toast from $40.00 to $46.00 and gave the company a "neutral" rating in a research note on Tuesday, July 29th. Twelve equities research analysts have rated the stock with a hold rating and fifteen have given a buy rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $44.33.

Insider Transactions at Toast

In related news, CRO Jonathan Vassil sold 6,592 shares of the firm's stock in a transaction that occurred on Wednesday, July 2nd. The stock was sold at an average price of $42.59, for a total value of $280,753.28. Following the sale, the executive directly owned 61,791 shares in the company, valued at $2,631,678.69. This trade represents a 9.64% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, General Counsel Brian R. Elworthy sold 5,681 shares of the firm's stock in a transaction that occurred on Wednesday, July 2nd. The shares were sold at an average price of $42.59, for a total value of $241,953.79. Following the completion of the sale, the general counsel owned 221,767 shares in the company, valued at approximately $9,445,056.53. This represents a 2.50% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 466,131 shares of company stock worth $20,048,851 over the last quarter. Insiders own 13.32% of the company's stock.

Hedge Funds Weigh In On Toast

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. boosted its stake in Toast by 3.5% during the 1st quarter. Vanguard Group Inc. now owns 43,945,584 shares of the company's stock valued at $1,457,675,000 after purchasing an additional 1,471,352 shares in the last quarter. Capital International Investors boosted its stake in Toast by 1.9% during the 4th quarter. Capital International Investors now owns 41,961,233 shares of the company's stock valued at $1,529,657,000 after purchasing an additional 785,641 shares in the last quarter. FMR LLC boosted its stake in Toast by 22.1% during the 4th quarter. FMR LLC now owns 29,853,639 shares of the company's stock valued at $1,088,165,000 after purchasing an additional 5,403,896 shares in the last quarter. Price T Rowe Associates Inc. MD boosted its stake in Toast by 17.5% during the 1st quarter. Price T Rowe Associates Inc. MD now owns 23,454,209 shares of the company's stock valued at $777,978,000 after purchasing an additional 3,490,686 shares in the last quarter. Finally, T. Rowe Price Investment Management Inc. boosted its stake in Toast by 7.5% during the 1st quarter. T. Rowe Price Investment Management Inc. now owns 15,520,360 shares of the company's stock valued at $514,811,000 after purchasing an additional 1,082,958 shares in the last quarter. 82.91% of the stock is owned by institutional investors.

Toast Stock Performance

The business has a 50 day simple moving average of $44.52 and a 200-day simple moving average of $39.85. The stock has a market capitalization of $21.71 billion, a P/E ratio of 190.33 and a beta of 2.01.

Toast Company Profile

Toast, Inc operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast.

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