Last Updated: 12 Nov 2024
Executive Summary
Toast Inc. (TOST) is a cloud-based technology platform provider for the restaurant industry. The company has a strong market position, with a large and growing customer base. Toast's financials are improving, with revenue and gross profit growing in recent quarters. The company is still unprofitable, but its losses are narrowing. Toast's stock price has been volatile in recent months, but it has outperformed the broader market over the past year.
Company Overview
Toast was founded in 2012 and is headquartered in Boston, Massachusetts. The company's platform provides restaurants with a suite of tools to manage their operations, including point-of-sale, online ordering, and inventory management. Toast also offers a range of financial services, such as payment processing and lending.
Toast has a large and growing customer base, with over 65,000 restaurants using its platform. The company's customers include a mix of independent restaurants and large chains, such as Chipotle and Olive Garden.
Fundamental Analysis
Toast's financials are improving, with revenue and gross profit growing in recent quarters. The company's revenue increased by 26.5% year-over-year to $465.8 million in the third quarter of 2023. Gross profit increased by 27.4% to $51.6 million.
Toast is still unprofitable, but its losses are narrowing. The company's net loss was $9.0 million in the third quarter of 2023, compared to a loss of $12.3 million in the same period last year.
Toast's balance sheet is strong, with $493.5 million in cash and equivalents and no debt. The company's cash flow from operations is also strong, with $32.2 million in the third quarter of 2023.
Technical Analysis
Toast's stock price has been volatile in recent months, but it has outperformed the broader market over the past year. The stock is currently trading at $37.95, up 25% from its 52-week low of $13.77.
The stock's technical indicators are mixed. The relative strength index (RSI) is above 50, indicating that the stock is overbought. However, the moving average convergence divergence (MACD) is below zero, indicating that the stock is in a downtrend.
Short Term Outlook
Toast's short-term outlook is uncertain. The company is facing a number of challenges, including rising costs and competition from larger players. However, Toast's strong market position and improving financials should help it to weather these challenges.
Long Term Outlook
Toast's long-term outlook is bright. The company is well-positioned to benefit from the growing demand for cloud-based restaurant technology. Toast's large and growing customer base, strong balance sheet, and experienced management team should help it to continue to grow and succeed in the years to come.
Analyst Recommendations
Analysts are generally positive on Toast. The average analyst rating is "buy," with a price target of $29.86. Three analysts have a "strong buy" rating, nine have a "buy" rating, 12 have a "hold" rating, one has a "sell" rating, and none have a "strong sell" rating.
