Toast Could Be 'Long-Term Winner' In US Restaurant Fintech Market, Says Bullish Analyst

Zinger Key Points

Toast Inc TOST has better positioning and a better product offering than its competitors, which could drive “meaningful market share gains,” according to BMO Capital Markets.

The Analyst: Analyst Rufus Hone initiated coverage of Toast with an Outperform rating and a price target of $45.

The Takeaways: Toast could prove to be "a long-term winner" in the U.S. restaurant financial technology market, Hone said in a Monday initiation note.

The company is poised to benefit from its "comprehensive product offering and highly efficient go-to-market strategy that underpins attractive/improving unit economics and ARPU growth," the analyst said.

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"TOST is benefiting from strong fundamental momentum in the business, despite recent GPV/location headwinds, in tandem with continued strong and improving unit economics," Hone said.

There is "meaningful upside" to the company's guidance for EBITDA margin expansion of 100-200 basis points in 2025 as well as for its longer-term margin targets, Hone stated. There is upside of around 5% to the company's adjusted EBITDA in 2026, he added.

TOST Price Action: Shares of Toast had risen by 3.17% to $38.78 at the time of publication on Monday.

Read More: Toast Analyst No Longer Bullish Despite Payments Stock Being Among ‘Best Share Gainers’

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TOSTToast Inc
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Got Questions? Ask
Which competitors of Toast might struggle?
How could restaurant tech investments shift with Toast's rise?
What other fintech companies could benefit from Toast's momentum?
Will investors flock to restaurant tech stocks now?
How does Toast's product offering compare to others?
Which financial metrics should investors monitor for Toast?
Could Toast's success impact restaurant valuations overall?
What trends in ARPU growth should investors watch?
How might margins affect investor sentiment towards Toast?
Which sector analysts are bullish on Toast's future?
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