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Investing.com - Needham raised its price target on Toast Inc. (NYSE:TOST) to $60.00 from $50.00 on Wednesday, maintaining a Buy rating following the company’s strong second-quarter performance. According to InvestingPro data, Toast’s stock has delivered an impressive 97% return over the past year, though it currently trades at a relatively high P/E ratio of 174x.
Toast exceeded expectations in its Q2 results and provided above-consensus guidance for the third quarter while raising its full-year 2025 outlook. The restaurant technology provider continues to gain market share in its core U.S. restaurant segment, adding a record 8,500 new locations during the quarter. The company’s strong performance is reflected in its 26.7% revenue growth and healthy current ratio of 2.51, indicating solid financial stability.
The company is expanding beyond its established markets, noting it launched its first restaurant in Australia as part of its international growth strategy. Toast also announced a new partnership with American Express (NYSE:AXP) that will enhance its Local by Toast app with integrated reservations and personalized dining features.
Needham highlighted recent enterprise client wins, including Firehouse Subs and Zabar’s in the second quarter, as evidence of Toast’s continued momentum. The company’s market expansion efforts and technology innovations, including the launch of Toast Go 3, are expected to support long-term market share gains.
The price target increase reflects Needham’s confidence in Toast’s growth trajectory as it continues to expand both its customer base and product offerings in the restaurant technology sector.
In other recent news, Toast Inc. reported its Q2 2025 earnings, revealing a mixed performance. The company missed earnings per share (EPS) expectations, posting an EPS of $0.13 compared to the forecasted $0.22, which marks a 40.91% negative surprise. However, Toast exceeded revenue expectations, bringing in $1.55 billion against a projected $1.52 billion. In light of these results, Goldman Sachs maintained its Neutral rating on Toast with a price target of $51.00. The firm acknowledged Toast’s strong performance in its software and payments segments, despite the earnings miss. Goldman Sachs highlighted the potential understatement of Toast’s performance due to demand disruption in Toast Capital earlier in the quarter. These developments reflect the company’s ongoing challenges and opportunities in the market.
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