Toast (NYSE:TOST) stock is rallying 16% in early trading after the company reported stronger-than-expected second-quarter results and increased its Q3 sales guidance.
Boston-based Toast provides “a cloud-based and digital technology platform” to restaurants. The company’s offerings include a tabletop point-of-sale (POS) system and an online platform for customers to “order and pay from their mobile devices.”
Toast’s Q2 Results
For the second quarter, the company reported a per-share loss of 11 cents, versus analysts’ average estimate of a loss per share of 23 cents. The firm’s revenue jumped 59% year-over-year to $675 million, above the mean estimate of $647.6 million.
Additionally, Toast’s Q2 subscription revenue doubled versus the same period a year earlier, while it gained more than 6,000 additional customers during the quarter, setting a new record in the latter category.
For Q3, Toast raised its revenue outlook by 5% at the midpoint of its guidance range. The company now anticipates that it will generate Q3 sales of $700 million to $730 million. At the midpoint of the range, its revenue would increase by 47% versus Q3 of 2021.
“Toast continues to build on our operational momentum in Q2, posting strong efficient growth, exceeding both our revenue and profit expectations,” said Toast CEO Chris Comparato during the company’s Q2 earnings call. “This momentum stems from the consistent execution of our core growth strategy, driving location growth, deepening our ability to serve all segments of the restaurant industry and delivering product innovation for restaurants,” he explained.
TOST Stock: Analyst Raises Price Target
Needham analyst Mayank Tandon increased his price target on TOST stock to $27 from $21 in the wake of the company’s Q2 results. The company’s Q3 outlook was upbeat, showing that the demand for its offerings is strong and that it remains well-positioned within its sector, wrote Tandon. He maintained a “buy” rating on the shares.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.