Shares of Toast Inc (NYSE:TOST) added more than 40% in November, after the company reported strong third-quarter results.
Although the Boston-based company is among the "best share gainers in the payments space," its stock has risen more than 135% year to date, according to Goldman Sachs.
Analyst Will Nance downgraded the rating for Toast from Buy to Neutral, while raising the price target to $45.
The Thesis: The inflection in operating leverage has played out, with the company significantly curtailing costs into 2024, Nance said in the downgrade note.
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After the rally this year, the stock already reflects the significant upside that was expected from the move to a software-based valuation framework, he added.
Business confidence is improving in the wake of the November Presidential elections, the analyst stated. Against this backdrop, market pricing "has become a key theme in 2025," and Toast seems among the well positioned companies in terms of revenue mix and exposure to SMBs (small and medium businesses), he further wrote.
Price Action: Shares of Toast declined by 2.66% to $42.38 in premarket trading on Monday.
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