UBS Keeps Buy Rating on Toast (TOST)

Toast, Inc. (NYSE:TOST) is one of the 10 Best Tech Stocks Under $50 To Invest In. On June 25, UBS reiterated its “Buy” rating for Toast, Inc. (NYSE:TOST) with a price target of $47.

The firm highlighted Toast, Inc.’s (NYSE:TOST) strong growth in annual recurring revenue (ARR). UBS sees this growth as the most important metric for investors.

UBS Keeps Buy Rating on Toast (TOST)

UBS pointed out that the company’s SaaS (software as a service) ARR is compounding at about a low 30s percentage rate. According to the equity research firm, this growth is driven by mid-20s percentage growth in locations and mid-single-digit percentage growth in SaaS ARR per location.

The firm noted that Toast, Inc. (NYSE:TOST) is expanding into Enterprise locations, which lowers the average revenue per user on new business. Despite this, UBS pointed out that Enterprise locations offer appealing payback periods that help the overall business.

According to UBS analysts, Enterprise customer lifetime value to customer acquisition cost (LTV/CAC) ratios are more attractive than small and medium-sized business restaurants because of the longer relationships and reduced churn rate.

Toast, Inc. (NYSE:TOST) is an American financial technology and cloud-based restaurant management software company that provides a cloud-based, all-in-one digital technology platform of software-as-a-service (SaaS) products and financial technology solutions to restaurants across point of sale (POS), payments, and operations.

While we acknowledge the potential of TOST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TOST and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.