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

Toast Inc (NYSE: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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