Toast Stock Heats Up After Beat-and-Raise

TOST is headed for two straight days of double-digit gains

Deputy Editor
Nov 11, 2022 at 9:04 AM
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Toast Inc (NYSE:TOSTcould be one of the big winners this Friday, after the company reported slimmer-than-expected losses of 3 cents per share and better-than-expected revenue of $752 million for the third quarter. The encouraging results lead restaurant software firm -- which was recently a bullish pick by Schaeffer's Senior Market Strategist Chris Prybal -- to hike its full-year revenue guidance. 

Toast stock was last seen 11.3% higher to trade at $22.25 before the bell. This positive price action follows yesterday's pop of 13.4%, and is likely to see TOST fill last week's broad market bear gap. Heading into today, the shares were down 42% in 2022.

At least three analysts hiked their price targets following the results, with Credit Suisse, Needham, and Wells Fargo adjusting up to $21.50, $32, and $27, respectively. Coming into today, five of the 12 brokerages covering TOST held "hold" or "strong sell" ratings, so there was upgrade potential looming.

Options traders could begin unwinding their pessimism, as they've favored puts recently. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Toast stock sports a 10-day put/call volume ratio of 1.69 that sits higher than all but 6% of readings from the past year. Echoing this, TOST's Schaeffer's put/call open interest ratio (SOIR) of 0.7 stands 84% higher than all other annual readings.


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