Stephen Fredette, President of Toast, Inc. (NYSE:TOST), has sold a total of 19,627 shares of the company's Class A Common Stock, according to a recent SEC filing. The transactions, executed on September 24, amounted to over $549,575, with the shares sold at a weighted average price of $28.001. The price range for these shares varied from $28.00 to $28.01.
This sale was conducted under a Rule 10b5-1 trading plan, which Fredette had adopted on June 11, 2024. Such plans allow company insiders to set up a predetermined schedule for buying or selling stock to avoid accusations of trading on insider information.
Following the sale, Fredette's direct holdings in Class A Common Stock are reported to be 2,078,682 shares. Additionally, through indirect ownership via family trusts, Fredette has interests in 177,500 shares held by the Fredette Family Nominee Trust, 419,991 shares by the SHFA Family Trust, and 2,303,442 shares by the SHFA 2021 Nominee Trust.
The filing also noted that Fredette owns an aggregate of 25,722,670 shares of Class B common stock, which can be converted into Class A shares at any time. This transaction reflects a notable change in Fredette's investment in Toast, Inc., a company providing computer processing and data preparation services.
Investors and market watchers often scrutinize Form 4 filings to gain insight into the actions of company insiders, as these can sometimes provide valuable signals about the company's prospects and the confidence that executives have in their firm's future.
In other recent news, Toast Inc. showcased a strong performance in its second-quarter 2024 results, exceeding expectations with significant growth in key financial metrics. The company reported a record addition of 8,000 net new locations, leading to a 29% year-over-year increase in recurring gross profit streams. Adjusted EBITDA reached $92 million, marking a healthy 27% margin on these profit streams. Notably, Toast achieved GAAP income profitability earlier than expected, leading the company to raise its full-year financial outlook.
Among other developments, the company's recurring gross profit grew by 29% year-over-year to $344 million. The fintech gross profit also increased by 23% in the second quarter, with gross payment volume (GPV) rising to $40.5 billion, a 26% year-over-year growth. However, the company also noted a 3% decline in GPV per location in Q2, primarily due to a slight drop in same-store sales.
Toast Inc. also announced plans to increase investment in key business areas in the second half of the year. The company expects to maintain breakeven on a GAAP basis for the remainder of the year. Despite a slight increase in churn rate, now slightly above 10%, the company expects the impact on annual recurring revenue (ARR) to remain low.
InvestingPro Insights
As Toast, Inc. (NYSE:TOST) navigates through the market, recent data from InvestingPro provides a nuanced picture of the company's financial health and stock performance. Notably, analysts are showing optimism regarding Toast's earnings, with three analysts revising their earnings projections upwards for the upcoming period, hinting at potential growth in net income. This positive sentiment is echoed by predictions that the company will become profitable this year, a significant turnaround considering the company was not profitable over the last twelve months.
InvestingPro data reveals a substantial market capitalization of $15.54 billion for Toast, Inc., yet the company's P/E ratio stands at a negative value of -87.34, reflecting the market's expectations of future profitability against current earnings. Additionally, the company's revenue has seen a robust growth of 32.19% over the last twelve months as of Q2 2024, indicating an expanding market presence. Despite this, Toast suffers from weak gross profit margins, currently at 22.66%, which may affect its bottom line.
The stock's volatility is also worth noting, with price movements being quite erratic. However, with the company's stock trading near its 52-week high and at a high Price / Book multiple of 11.97, investors seem to be valuing its growth prospects. It's also important to mention that Toast, Inc. does not pay a dividend, which could influence investment decisions for income-focused shareholders.
For those seeking a deeper dive into the company's prospects, InvestingPro offers additional insights. There are currently 9 more InvestingPro Tips available for Toast, Inc. at InvestingPro, which can provide investors with a more comprehensive understanding of the company's financial landscape and market potential.
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