Toast Shares Decline On Soft Guidance

 Toast Shares Decline On Soft Guidance

Toast (TOST) Shares Decline 20% On Soft Guidance

The stock price of Toast (TOST) declined by 20% after the company announced its 3rd quarter results. According to the data, the company reported a loss of 9 cents per share.

In addition, the EBITDA of Toast was around $35 million, which was way ahead of the $20 mn estimate. Furthermore, the revenue during the quarter was around $1.03 bn, which was in line with expectations.

If we look at the GPV of Toast, it touched $33.7 billion during Q3, which was close to the $33.82 bn forecast. Similarly, the recurring revenue (annual) was $1.22 billion, while the forecasted number was around $1.23 billion.

TOST Q3 Revenue Meets Forecast

Overall, the results of Toast (TOST) were pretty good during Q3 2023, as the company improved its ARR by almost 40%. According to the Toast CEO, the company focused on improving its top-line growth and also worked on improving its margin expansion.

For the next quarter (Q4), the Toast (TOST) expects its revenue to be between $1 - $1.03 bn. On the contrary, the market was looking for a revenue figure of around $1.03 billion, which is near the upper forecast limit set by the Toast. In addition, the expected EBITDA during Q4 2023 for Toast is expected to be around $5 - 15 million.

After the Q3 results announcement, Morgan Stanley analysts have set a new price target for Toast at $22/share. When compared with the previous price target, that's a reduction of almost $6. The analysts also maintained an 'overweight' rating on the Toast stock, given the current situation.

According to BTIG, the 20% drop in the company's stock can be attributed to the GPV miss. Looking ahead, the company will face some troubles in terms of revenue due to the headwinds faced by the same-store sales. Now, that's a factor that can't be controlled by the TOST management.

With only one more quarter to go, the Toast (TOST) company will have to make some major changes to post a good yearly result.

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