Toast Inc. (TOST) PT Raised to $66 at Canaccord Genuity After Its First Public Report

Canaccord Genuity analyst David Hynes Jr. raised the price target on Toast Inc. (NYSE: TOST) to $66.00 (from $64.00) after the company reported Q3 ARR of $543.8M, up 77% year-over-year and up nearly $50M sequentially. GAAP revenue was $486.4M, up 115% y/y and strong across each of the revenue lines. Subscription revenue growth accelerated sequentially to 67%, a good sign in terms of ongoing location additions and module attach. Adjusted EBITDA loss came in at ($9.7M) and FCF burn at ($19.5M), both in-line with management’s planned investments to drive growth in the business.

The analyst reiterated a Buy rating, stating "Toast is off to a good start as its first print post-IPO easily topped conservative expectations. If you dig layer deeper, each of the firm’s four key growth variables showed continued progress (which we detail in the bullets below), which tells us that (a) Toast is executing well when it comes to adding new locations and attaching more product, and (b) the restaurant industry continues to show positive signs of post-COVID recovery, which should drive a degree of stability in the firm’s payments business."

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