Toast (NYSE:TOST) has been making waves in the market lately, with shares rising 2.3% after Mizuho Securities upgraded the stock to Outperform from Neutral. Analyst Dan Dolev believes that there is significant potential for the restaurant software provider to reduce its credit processing costs, which could have a positive impact on profitability.
In a note to clients, Dolev highlighted that Toast may be paying more for credit interchange compared to its competitors. However, he sees an opportunity for the company to renegotiate these fees and improve its profitability significantly. If successful, Dolev predicts a 30%-60% upside to the current EBITDA consensus for 2026. He also mentioned that Toast could become the fourth-largest U.S. retailer by volume in 2025.
Dolev’s Outperform rating aligns with the SA Quant system rating and the average Wall Street analyst rating, both of which are at Buy. It’s worth noting that TOST has already seen a 46% surge this year, outperforming the S&P 500’s 17.2% climb.
The potential for Toast to reduce its credit processing costs is an exciting development for investors. Lowering these expenses could have a significant impact on the company’s bottom line and drive future growth. With the support of Mizuho Securities and positive analyst ratings, the outlook for Toast appears to be promising.
Investors are keeping a close eye on Toast’s performance and any updates regarding its credit processing costs. The company’s ability to renegotiate fees and improve profitability could be a game-changer in the competitive restaurant software industry.
As Toast continues to innovate and expand its market presence, investors are optimistic about its growth prospects. The company’s focus on improving operational efficiency and reducing costs is a positive sign for its long-term success.
In conclusion, the recent upgrade by Mizuho Securities and the potential for Toast to lower its credit processing costs have put the company in a favorable position. Investors are hopeful that these developments will drive future growth and profitability for Toast, making it an attractive investment opportunity in the restaurant software sector.