Why Toast (TOST) Shares Are Falling Today - Toast (NYSE:TOST)

Baird analyst David Koning downgraded Toast Inc TOST from Outperform to Neutral and lowered the price target from $26 to $24.
The analyst appreciated the Toast theme, including significant share gains across the restaurant vertical and robust growth in revenue per location.
TOST has ~74k locations within Koning's estimated ~700k US locations that are not part of large chains of >1k locations.
After a period of solid restaurant growth, the analyst considers it possible that a macro slowdown could impact restaurant growth.
However, Koning viewed the risk and reward as pretty balanced, considering slowing room to penetrate TAM, slowing macro and restaurant growth, share creep, and valuation.
The analyst expected Toast's diluted share count to reach 600 million once it reached profitability.
Toast reported third-quarter FY22 revenue growth of 55% year-on-year to $752 million, beating the consensus of $721.5 million.
ARR for Q3 was $868 million, up 60% Y/Y.
Gross Payment Volume (GPV) increased 53% Y/Y to $25.2 billion.
EPS loss of $(0.19) missed the consensus loss of $(0.09).
Toast raised its FY22 revenue to $2.692 billion - $2.722 billion (up from $2.620 billion - $2.660 billion), above the consensus of $2.66 billion.
Price Action: TOST shares traded lower by 3.11% at $21.65 on the last check Tuesday.

Toast's Growth Could Take A Hit As Macro Uncertainties Weigh, Analyst Says