Shares of Toast, Inc. (TOST) plummeted 8.56% in early trading on Wednesday, despite the company reporting better-than-expected second-quarter earnings and receiving multiple analyst upgrades. The sharp decline comes as a surprise to many, given the recent wave of positive analyst sentiment towards the stock.

Toast reported quarterly earnings of 13 cents per share, surpassing the analyst consensus estimate of 11 cents. The company also beat revenue expectations, posting quarterly sales of $1.550 billion against an estimated $1.521 billion. Following these results, several major financial institutions raised their target prices for Toast. Mizuho boosted its target from $49 to $57, JP Morgan increased its projection from $42 to $52, and other firms like Stephens, RBC, KBW, and Morgan Stanley also raised their targets to the $50-$54 range.

However, the market's reaction stands in stark contrast to the analyst optimism. The significant drop suggests that investors may be focusing on aspects of the Q2 results that have triggered concerns about Toast's near-term prospects. While the company reported strong growth in new locations and recurring gross profit, investors might be reacting to specific metrics, guidance, or commentary provided in the earnings report that raised doubts about future growth or profitability. As the trading session progresses, more details may emerge to explain the disconnect between analyst upgrades and the market's decidedly negative reaction to Toast's latest financial results.