By Senad Karaahmetovic
Toast (NYSE:TOST) shares are trading over 11% lower in pre-market trading after the company reported weaker-than-expected Q4 results.
Toast reported a loss per share of $0.19 on revenue of $769 million, which compares to the analyst consensus for a loss per share of $0.05 on revenue of $752.7M. Revenue grew 50% year-over-year.
“Toast’s strong Q4 results round out a year of durable, efficient top-line growth, consistent margin improvement, and continued product innovation,” said Toast CEO Chris Comparato.
For this quarter, the company guided to $760M in revenues (up or down $15M), above the consensus of $751M. Full-year revenue is seen in the range of $3.57-3.66B, somewhere in line with the consensus of $3.61B.
Goldman Sachs analysts said:
“While we expect the company's LT margin target to be well received, we believe the bar coming into the print was higher, and we believe the relatively inline guidance coupled with the miss on subscription and net adds is likely to lead shares to underperform in the near term.”
Mizuho analysts said the company is facing expectations that are “cooked to perfection” and this is weighing on the stock. Still, the company remains a “category killer.”
“With the stock up 45% YTD, and expectations for 2023 sales and EBITDA likely running ahead of themselves, the guide may not meet investor enthusiasm. These factors are likely to cause a negative stock reaction today, which we view as a buying opportunity as TOST remains one of the best stories in payments,” they said in a note.