Toast’s restaurant management software is gaining popularity, but the company is still facing financial challenges. Despite this, shares of Toast recently received a boost from a positive analyst note, sparking interest in the stock.
Dan Dolev at Mizuho upgraded his rating on Toast to outperform and raised his price target to $33 per share, implying a 21% gain over the next 12 months. This positive outlook has investors wondering if now is the right time to buy Toast stock.
The strengths of Toast lie in its integrated solutions for restaurant owners, offering a one-stop-shop for managing orders, payments, and more. With 112,000 locations using its services, Toast is positioned as a dominant player in the industry. Additionally, the company’s expansion into international markets and new software offerings provide growth opportunities.
However, Toast is still reporting significant losses, with $83 million lost in the first quarter of 2024 and $248 million over the past year. The company’s high valuation and ongoing losses raise concerns about its path to profitability.
Despite the risks, for investors with a moderate to strong risk tolerance, adding Toast stock to a diversified portfolio could be a smart move. With revenue soaring and operating expenses stabilizing, there is potential for strong profits in the future.
Overall, Toast’s growing popularity and potential for profitability make it an intriguing investment opportunity for those willing to take on some risk. Investors should carefully weigh the company’s strengths and challenges before deciding whether to buy Toast stock.
