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On Friday, Mizuho (NYSE:MFG) Securities showed a positive stance on Toast Inc. (NYSE: NYSE:TOST) by increasing the company’s price target from $40.00 to $45.00. The firm continues to recommend an Outperform rating for the stock. The adjustment in price target follows Toast’s announcement of robust fourth-quarter earnings and a promising forecast for the fiscal year 2025. According to InvestingPro data, Toast has delivered an impressive 94% return over the past year, with five analysts recently revising their earnings estimates upward.
Toast, known for its cloud-based restaurant software, has recently reported strong financial results earlier in the week, with revenue reaching $4.96 billion in the last twelve months and showing robust growth of 28%. The company’s outlook for the upcoming year was particularly optimistic, which has played a significant role in Mizuho’s revised price target. Analysts at Mizuho highlighted two main areas that reinforce their bullish perspective on the company’s stock, now valued at $23 billion by market capitalization.
Firstly, Toast’s growth initiatives, which include expanding internationally and into the retail sector, have been identified as key focus areas for fiscal year 2025. The management team has provided early data points that demonstrate the effectiveness of these strategies. Secondly, the firm anticipates that the financial technology (FinTech) segment’s net take rates and Annual Recurring Revenue (ARR) growth will remain robust. InvestingPro subscribers can access 10+ additional key insights about Toast’s growth prospects and financial health metrics.
Based on these developments, Mizuho has increased its estimates for Toast’s financial performance for fiscal years 2025 and 2026. The raised price target and maintained Outperform rating reflect Mizuho’s confidence in Toast’s potential for sustained growth and profitability in the coming years. According to InvestingPro’s Fair Value analysis, Toast is currently trading slightly above its intrinsic value. Discover comprehensive valuation metrics and a detailed Pro Research Report covering Toast and 1,400+ other US stocks on InvestingPro.
In other recent news, Toast Inc. has seen several adjustments to its stock price targets from various analyst firms, reflecting its latest financial performance and strategic developments. RBC Capital Markets raised Toast’s price target to $45, citing strong performance and expansion into international markets, with revised revenue and adjusted EBITDA estimates for 2025 at $6.12 billion and $516 million, respectively. Meanwhile, Compass Point adjusted its price target to $47, maintaining a Buy rating, despite lowering its forecasts for adjusted gross profit and operating income for 2025. The firm remains optimistic about Toast’s growth, particularly in international expansion and same-store sales recovery.
Keefe, Bruyette & Woods also increased their price target for Toast to $42, following a positive fourth-quarter earnings release that prompted an upward revision of EPS forecasts for 2025 and 2026. The firm noted improvements in fintech pricing and subscription revenue conversion as positive factors. Canaccord Genuity raised its price target to $48, highlighting Toast’s market share growth potential and profitability improvements, including a notable increase in EBITDA margins in 2024. The firm remains confident in Toast’s ability to maintain its growth trajectory despite the high valuation.
These recent developments emphasize the diverse perspectives among analysts regarding Toast’s future performance, with a general consensus on the company’s potential for growth and profitability.
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