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Investing.com - Bernstein SocGen Group raised its price target on Toast Inc. (NYSE:TOST) to $48.00 from $41.00 on Thursday, while maintaining a Market Perform rating on the restaurant technology company. The new target sits within the broader analyst range of $36 to $60, as tracked by InvestingPro.
The price target increase follows Toast’s second-quarter performance, which Bernstein SocGen described as "firing on all cylinders" with a "steady drumbeat of beats." The company added 8,500 new locations during the quarter, bringing its total to 148,000 locations. This expansion has contributed to impressive year-over-year revenue growth of 26%, with the company generating $5.5 billion in revenue over the last twelve months.
Toast’s newer segments, including enterprise, international, and food and beverage retail, have now surpassed 10,000 locations and are increasingly contributing to location growth. The company’s recurring gross profit beat expectations by 6%, while adjusted EBITDA exceeded forecasts by 16%.
Bernstein SocGen noted that Toast’s third-quarter and implied fourth-quarter guidance appears "bit light," which it attributes to management’s "usual conservatism," the lapping of elevated software ARR/revenue conversion, and higher hardware costs from tariffs.
The guidance calls for 24% and 21% growth at midpoint on recurring gross profit for the third and fourth quarters respectively, while EBITDA growth is projected at 28% and 23%, slightly below consensus expectations of 30% and 32%.
In other recent news, Toast Inc. reported its Q2 2025 earnings, revealing a significant miss on earnings per share (EPS) while surpassing revenue expectations. The company posted an EPS of $0.13, falling short of the anticipated $0.22, but achieved revenue of $1.55 billion, exceeding the forecast of $1.52 billion. Analysts have responded positively to Toast’s performance, with RBC Capital raising its price target to $50, citing strong annual recurring revenue growth and record net location additions. JPMorgan also increased its price target to $52, maintaining a Neutral rating due to better-than-expected recurring gross profit and EBITDA metrics. Needham raised its target to $60, highlighting Toast’s above-consensus guidance for the third quarter and its increased full-year 2025 outlook. Goldman Sachs maintained a Neutral rating with a $51 price target, noting the company’s strong performance in software and payments segments despite earlier disruptions in Toast Capital demand. These recent developments reflect Toast’s continued growth and expansion in the market.
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