Toast: Don't Let Valuation Get Out Of Control, Trim Here (Downgrade)

Toast has surged ~50% from YTD lows, prompting a downgrade to neutral as valuation now appears stretched. TOST's Q2 results were strong: 23% y/y revenue growth, 28% subscription growth, and improving gross margins via AI-driven efficiencies. Despite robust ARR and GPV growth, macro headwinds in the restaurant sector and intensifying competition temper forward expectations.