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Analysts at the firm told investors that they like big market share gainers and “Toast is one of the best companies/products” on its list.
“We like restaurants, we like fintech, and we like Toast at 4x 2024E revenue,” the Wall Street firm added. In addition, they noted the company’s recent earnings release, with Q3 revenue in line after many strong beats as the restaurant industry slows.
“While the stock was a bit burnt to a crisp on Q3 earnings, we appreciate the strong growth profile. And how incremental EBITDA margins were the strongest we’ve seen,” said the analysts at Baird.
“We could see adjusted EPS of ~$1 by 2027 if incremental margins sustain and adjusted revenue CAGR is ~22% over the next four years,” they concluded.
Toast shares are up around 1.9% at the time of writing on Friday after falling more than 13% on Wednesday and a further 6% during Thursday’s session following its latest quarterly earnings.
