Nucor earnings beat by $0.08, revenue fell short of estimates
Monday, Toast Inc. (NYSE: NYSE:TOST) saw its price target increased by DA Davidson from $38.00 to $42.00, while the firm kept a Neutral rating on the company’s shares. The adjustment came after Toast disclosed its fourth-quarter earnings, which surpassed DA Davidson’s expectations in terms of total revenue and adjusted EBITDA. According to InvestingPro data, Toast has seen impressive momentum with a 78.76% return over the past year, while analysts’ price targets currently range from $27 to $60, reflecting diverse market opinions. Five analysts have recently revised their earnings estimates upward for the upcoming period.
Toast’s revenue for the quarter was reported to be 2% higher than what DA Davidson had projected. Additionally, the company’s adjusted EBITDA was 16% above the forecast. These results prompted the research firm to revise their adjusted EBITDA forecasts upwards by an average of 5%. With a market capitalization of $23 billion and strong revenue growth of 28.33% in the last twelve months, Toast continues to expand its market presence. InvestingPro analysis indicates that Toast is currently trading above its Fair Value, with 12 more exclusive insights available to subscribers.
The company also provided its initial outlook for 2025. The guidance included a year-over-year growth of 23%-25% in Non-GAAP FinTech & Subscription gross profit, amounting to between $1,745 million and $1,765 million. Furthermore, Toast anticipates a 37%-42% year-over-year increase in adjusted EBITDA, which is expected to be in the range of $510 million to $530 million.
DA Davidson’s analyst Peter Heckmann commented on the financial performance and the updated forecasts, stating, "Toast reported 4Q results with total revenue 2% ahead of our forecast and adjusted EBITDA 16% above our forecast. With results, management provided initial guidance for 2025, including 23%-25% Y/Y growth in Non-GAAP FinTech & Subscription gross profit to $1,745M-$1,765 and 37%-42% Y/Y growth in adjusted EBITDA to $510M-$530M. Following the update, we are raising our adjusted EBITDA forecasts by an average of 5% each. We are maintaining our NEUTRAL rating on Toast, but raising our price target to $42 (from $38)."
The revised price target reflects the company’s solid performance and optimistic projections for the coming year. Despite the positive momentum indicated by the recent financial results and future guidance, DA Davidson has chosen to maintain a Neutral stance on Toast Inc. stock. For a deeper understanding of Toast’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company’s financial health, market position, and future potential.
In other recent news, Toast Inc. has reported notable financial results and strategic developments. The company concluded 2024 with a nearly 40% increase in subscription and financial products gross profit and a significant EBITDA margin expansion of 28%. Analysts from DA Davidson highlighted that Toast’s fourth-quarter earnings surpassed their expectations, leading to an upward revision of the company’s EBITDA forecasts by an average of 5%. Mizuho (NYSE:MFG) Securities also raised its price target for Toast to $45, maintaining an Outperform rating due to the company’s robust earnings and optimistic financial outlook for 2025.
Additionally, RBC Capital Markets adjusted its price target for Toast to $45, citing the company’s strong performance and expansion into new markets, including international and enterprise sectors. Compass Point, while lowering its price target to $47, maintained a Buy rating, expressing confidence in Toast’s ability to outperform its conservative fiscal year guidance. The company is making strategic investments in international markets and enterprise adoption, aiming for a 330 basis points improvement in EBITDA margins in 2025.
Toast’s partnerships, such as the one with Hilton for payment solutions, and its international expansion, including a target of reaching 10,000 locations by the end of 2025, are significant developments. Despite potential pressures on margins due to increased investments, analysts remain optimistic about Toast’s growth trajectory and profitability margins. These recent developments reflect a cautious yet positive outlook from various analyst firms on Toast’s future performance.
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