Evercore ISI bullish on Toast, cites improved risk-reward after sell-off
Evercore ISI said Toast ‘s recent pullback has created a more attractive risk-reward setup. The investment firm upgraded the restaurant management software stock to an outperform rating from in line. Analyst Adam Frisch’s $40 price target offers upside of 19% from where shares of Toast closed Friday. Toast stock has slipped 12% over the past 12 months, opening the stock up to an attractive buying opportunity, Frisch said. TOST 1Y mountain TOST 1Y chart “EV/EBITDA is down 44% off August highs and now discounts slower near-term U.S. adds and recurring [gross profit] growth rates in our view,” the analyst wrote. “We could get some modest multiple expansion on higher projections. The risk/reward on shares seem much more skewed to the upside on a 12-month view, with some volatility (we est ~15%) around the 4Q print.” Evercore ISI said its longer-term thesis remains intact, with 2026 shaping up as a transition year before growth reaccelerates in 2027 and beyond. Frisch also expects average revenue per user and EBITDA growth to improve in the coming years. Frisch noted that the restaurant operating backdrop continues to improve and has risen to its highest level since 2023. “We still believe the majority of new growth vector adds will come from international, with enterprise and retail lagging given longer sales cycles and product development requirements,” the analyst said.
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