DA Davidson Cuts Toast’s Price Target to $36 from $42 as Growth Normalizes
DA Davidson lowered Toast Inc.’s price target to $36 from $42 and maintained a Neutral rating, forecasting more measured growth and margin expansion after four to six quarters of elevated performance. Meanwhile, annual recurring revenue topped $2 billion—double two years—while Toast IQ saw 235,000 uses across 25,000+ restaurants.
1. DA Davidson Lowers Price Target
DA Davidson cut Toast Inc.'s price target to $36 from $42 while maintaining a Neutral rating, forecasting growth and margin expansion to moderate from elevated levels seen over the past four to six quarters. The firm highlighted recurring Gross Payment Volume as a key strength that could drive additional upside.
2. ARR Surpasses $2 Billion
Toast topped $2 billion in annual recurring revenue in the third quarter of fiscal 2025, doubling ARR in two years and underscoring the platform's scalability and resilient growth trajectory within the restaurant industry.
3. Strong Adoption of AI-Driven Products
Early rollout of AI products such as Toast IQ and Toast Advertising has seen robust engagement, with over 25,000 restaurants using Toast IQ more than 235,000 times since October, reflecting deepening customer integration and potential for incremental revenue streams.