JP Morgan Hikes Toast (TOST) Price Target on Strong Earnings and Growth

Toast, Inc. (NYSE:TOST) is one of the best stocks to invest in for long-term growth. On August 6, JP Morgan maintained its Neutral rating on Toast, Inc. (NYSE:TOST), but increased its price target for the stock from $42 to $52. The new price target represents a solid 19.2% upside from the current market price of $43.62. JP Morgan cited strong Q2 earnings, but remains cautious with its Neutral rating due to the stock’s valuation.

The company reported a revenue of $1.55 billion for the quarter,  a 25% year-over-year growth, and beat Wall Street estimates of $1.52 billion. Toast has also been steadily improving its margins over the last few quarters. The net margin for Q2 stood at 5.16%, compared to 1.13% for the same quarter last year. The company reported an EPS of $0.249, handily beating analyst estimates of $0.225.

The company’s growth can be attributed to a number of factors. It reported a record 8,500 net new locations added, expanding its base to 148,000 locations. The company is spreading its wings globally, as it started operations in Australia, its fourth market. The company also saw deeper client engagement through its new AI features like ToastIQ, which helps enhance restaurant operations through automated workflows.

Toast provides a one-stop shop, cloud-based software and hardware platform for restaurants. These platforms help clients to manage online ordering, point-of-sale payments, payroll, and marketing, among other operations under one system.

While we acknowledge the potential of TOST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.