Marqeta Gets 20% Price Target Cut, Toast Gets 20% Price Target Bump By This Analyst After Q2 Performance

  • Results were solid amid a mix of macro challenges, with management from Marqeta, Inc MQ and Toast, Inc TOST having contrasting views for the remainder of the year, Mizuho analyst Dan Dolev noted.
  • He updated estimates & price targets post week 3 of 2Q earnings. 
  • Dolev maintained Marqeta with a Buy and cut the price target from $12 to $10. He hailed MQ's better than anticipated earnings, albeit the forward guidance and departure of the CEO/Founder and the COO put a slight damper on results. 
  • A key drag on the stock was the anticipated slowdown in growth from BNPL & crypto clients and more hesitation on behalf of fintech, he said.
  • TPV for the top five customers accelerated to +48% Y/Y (vs. +39%), whereas other customers slowed from +168% to +81% Y/Y. 
  • The price target reflected his downward revision to the 2024 gross profit multiple amid management caution, he added.
  • On the other hand, Dolev maintained Toast with a Neutral and raised the price target from $18 to $22.
  • TOST printed a solid quarter for 2Q, reporting an improvement in most primary KPIs paired with an increase to the FY guide greater than the 'beat' during the quarter, he noted. 
  • Record new location adds GPV acceleration and strong acceleration in GPV per location were all notable positives, with some moderation to the gross and net take rates sequentially, he said. 
  • Dolev views the increase in GPV / location to nearly $1.4 million as the most significant positive. The price target reflected the FY24 GP multiple boost, given management's forward optimism, he added.
  • Price Action: MQ shares traded higher by 1.18% at $8.61 on the last check Monday.
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