Toast (TOST) ‘well-positioned to succeed’ – Jefferies
Jefferies started shares of Toast Inc (NYSE:) at Buy with a $28 price target on Tuesday, with analysts writing in a note that the company has established itself as a “leading tech platform.”
Toast is a “leading player in a large market,” said the analysts. “TOST posted a rapid 60% CAGR from 2019-2022, reaching $2,731M of total revenue. Despite its considerable scale, at 85k locations, TOST has penetrated only ~10% of the 860k restaurants in the U.S., leaving it ample runway for growth.”
“TOST’s TAM expands after factoring in international markets and additional Software and FinTech solutions it can offer. Mgmt measures its serviceable addressable market (SAM) at $15B. We estimate TOST can grow at least 25%+ annually through 2025,” the analysts added.
The analysts went on to explain that TOST is attractive long-term as it is established as one of the largest restaurant tech platforms and is growing rapidly, while they see a “great entry point” for the stock at current levels.
“TOST is well-positioned to succeed due to 1) an ongoing wave of modernization at restaurants driving tech spend higher and 2) significant room to upsell/cross-sell optional solutions back into the large and growing base,” said the analysts.
TOST shares are up over 3% Tuesday.
