This Restaurant Payments Stock Is Up 15% In A Month: Here’s Why Goldman Sachs Sees Further Upside

According to a CNBC report, the investment bank upgraded Toast Inc. to ‘Buy’ from ‘Neutral,’ raising its 12-month price target to $36 from $30.

• According to the report, Goldman believes the stock is well positioned to buy at a cheap valuation after its underperformance in the first half of the year. 
• Despite the soft performance this year, the analyst said the underlying fundamentals of Toast remain strong. 
• According to Koyfin data, the 12-month average price target for Toast is $34.27, implying about 19% upside from its last close.

Toast Inc. (TOST) shares have risen more than 15% over the last month despite a decline this year. However, Goldman Sachs reportedly believes the stock is poised to bounce back, given that “the fundamental picture appears relatively strong.”

According to a CNBC report, the investment bank upgraded TOST stock to ‘Buy’ from ‘Neutral,’ raising its 12-month price target to $36 from $30. The revised target implies an upside of about 25% from its last close.

TOST Stock: Goldman Bullish On Product Offerings

According to the report, Goldman believes the stock is well positioned to buy at a cheap valuation after its underperformance in the first half of the year.

“TOST is well positioned to outperform from here as a result of its best-in-class product offering and the recent launch of AI-enabled marketing services (‘Toast IQ Grow’), which we believe could be a potential accelerant to (software-as-a-service average revenue per user),” the firm reportedly said in a note.

“On the market share side, we see continued runway to sustain share gains, driven by (total addressable market) expansion activity into retail, international and enterprise (we are particularly positive on the Retail momentum),” as per analyst Will Nance.

Despite the soft performance this year, Nance said the company's underlying fundamentals remain strong, with consumer spending resilient and gaining momentum throughout the quarter, both with and without fuel-related purchases.

According to the analyst, these spending trends could provide a favorable backdrop for Toast and support the stock's upside potential over the medium term.

Wall Street Consensus

As per Koyfin data, Wall Street consensus is largely in line with Goldman’s view, with 21 out of 30 analysts covering the stock rating it ‘Buy’ or higher. The remaining have a ‘Hold’ rating on TOST stock.

The 12-month average price target for Toast is $34.27, implying about 19% upside from its last close.

TOST Stock: Retail Stance

On Stocktwits, retail sentiment around TOST stock improved slightly from ‘bearish’ to ‘neutral’ over 24 hours, even as message volume jumped by a whopping 700%, according to platform data.

One bullish user noted the fresh analyst upgrade, commenting, “Bullish call, but the stock still needs follow-through to prove the setup.”

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TOST stock has fallen nearly 35% in the last year.

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