Goldman Sachs Downgrades Toast Inc. (TOST) to Neutral

Goldman Sachs analyst Will Nance downgraded Toast Inc. (NYSE: TOST) from Buy to Neutral with a price target of $45.00 (from $34.00).

The analyst comments: "We are moving to Neutral on TOST, despite our positive outlook on the stock and our above consensus estimates. Our original call on TOST was predicated on 1) an inflection in operating leverage, as TOST significantly bent the cost curve into 2024, 2) the potential for price increases, which would sustain GP growth, and 3) the upside optionality on valuation, as TOST was trading more in line with payments peers, and we saw significant upside from moving to more of a software-based valuation framework. With the stock up +135% YTD, we believe much of this is reflected in the stock, and we see the risk reward now as more balanced. Given the recent run in the stock, coupled with our view that near-term fundamentals are likely to be somewhat stable, we are moving to a Neutral rating. However, our target price is moving up 32%, reflecting the recent increase in valuations for names in our coverage with pro-cyclical exposures."

For an analyst ratings summary and ratings history on Toast Inc. click here. For more ratings news on Toast Inc. click here.

Shares of Toast Inc. closed at $43.54 yesterday.

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