Analysts offered their views on Toast, Inc (NYSE:TOST) post Q1 results. Credit Suisse analyst Timothy Chiodo had a Neutral rating with a price target of $22.
Toast reported record vital location adds of >5k (vs. consensus of 4k), with management confidence that this level can persist. Net take rate ~51bps (vs. Street ~44bps), which management suggested benefited from strong CNP and debit mix and cost optimizations, with management stating that they can sustain this level for the near term.
The company has not seen any material impact from macro trends, stating that restaurants have seen healthy demand from consumers.
Payroll attaches for new bookings during Q1 were up 2x YoY to ~30% (with management stating that most recent restaurant openings attach payroll at booking). Management continues to see very healthy payback periods.
KeyBanc analyst Josh Beck had an Overweight rating with a price target of $25. Toast reported a broad-based beat, topping revenue expectations by an HSD% with GPV a key driver, relatively consistent with Beck's preview.
The closely watched location net add metric of 5,300 was well ahead of Beck's and buy-side expectations and is a critical metric to validate both the TAM and GTM strategy.
Subscription ARPU also expanded nicely by ~$300 q/q, a better result than expected following recent "front-office" driven outperformance in the prior year and more of a shift toward a "back-office" focus this year.
Mizuho analyst Dan Dolev had a Neutral rating with a price target of $19. Following a challenged 4Q, TOST's 1Q was a step in the right direction as all major KPIs trended upwards.
Dolev was most encouraged by the continued convergence between TOST and Block, Inc (NYSE:SQ) Seller GPV, accelerating Q/Q incremental GPV dollars, and an upbeat guide on top-line and adj. EBITDA.
Most notably, management's commentary that TOST has "not seen any material impact on the current macro trends...and that there is no evidence of a slowdown...on restaurant spend" could help soothe some anxiety around macro uncertainties.
Price Action: TOST shares traded higher by 7% at $15.29 on the last check Friday.
