Stephen Fredette, President of Toast, Inc. (NYSE:TOST), has recently sold a significant number of shares in the company. According to the latest filings, Fredette sold a total of 45,167 shares of Class A Common Stock across two separate transactions. The sales were executed on October 8 and October 9, with the combined proceeds exceeding $1.3 million.
On the first day, Fredette sold 6,399 shares at a weighted average price of $29.002, with individual sales prices ranging from $29.00 to $29.01. The following day, a larger transaction took place involving 39,768 shares sold at an average price of $29.02, with prices varying between $29.00 and $29.15 per share. These transactions were conducted under a pre-arranged 10b5-1 trading plan, which allows company insiders to sell stocks at predetermined times to avoid accusations of insider trading.
Following the sales, Fredette still holds a substantial stake in Toast, Inc. The reported ownership includes 1,795,301 shares of Class A Common Stock, as well as indirect ownership through various family trusts. Additionally, Fredette owns an aggregate of 25,722,670 shares of the Issuer's Class B common stock, which is convertible into Class A shares at any time.
Investors often monitor insider transactions as they can provide insights into executives' perspectives on their company's current valuation and future prospects. However, it's important to note that such sales can be motivated by a variety of personal financial needs or portfolio diversification strategies and not necessarily a reflection of the company's health.
Toast, Inc., headquartered in Boston, Massachusetts, is known for its cloud-based, end-to-end technology platform designed to streamline operations for restaurants and improve the dining experience.
The transactions were duly reported in accordance with SEC regulations, and further details are available to the public upon request.
In other recent news, Toast Inc. reported impressive second-quarter results for 2024, including a record addition of 8,000 net new locations, contributing to a 29% year-over-year increase in recurring gross profit. Adjusted EBITDA reached $92 million, marking a healthy 27% margin on these profit streams. The company also achieved GAAP income profitability earlier than expected. The fintech gross profit increased by 23% in the second quarter, with GPV rising to $40.5 billion, a 26% year-over-year growth.
In response to its strong performance, Toast Inc. has raised its full-year financial outlook, projecting 27% to 29% growth in fintech and subscription gross profit, and adjusted EBITDA projections of $285 million to $305 million. On the downside, the company acknowledged a slight increase in churn rate, now slightly above 10%, and a 3% decline in GPV per location in Q2, primarily due to a decline in same-store sales.
In the wake of these developments, Toast Inc. plans to increase investment in key business areas in the second half of the year and anticipates maintaining breakeven on a GAAP basis for the remainder of the year. The company's co-founder and president, Aman Narang, emphasized the positive customer reception to Toast's all-in-one cloud approach and features such as inventory management and e-commerce capabilities. Management reiterated their commitment to investing in AI to create value for customers and the ongoing execution of their business strategy.
InvestingPro Insights
To provide additional context to Stephen Fredette's recent stock sales, let's examine some key financial metrics and insights from InvestingPro for Toast, Inc. (NYSE:TOST).
Toast's market capitalization currently stands at $16.29 billion, reflecting its significant presence in the restaurant technology sector. The company has demonstrated strong revenue growth, with a 32.19% increase over the last twelve months as of Q2 2023, reaching $4.386 billion. This robust growth aligns with Toast's expanding footprint in the restaurant industry and its ability to capture market share.
An InvestingPro Tip highlights that Toast's stock price movements are quite volatile, which could explain why insiders like Fredette might engage in pre-planned sales to manage their personal portfolios. Despite this volatility, the stock has shown a strong return of 60.55% over the past year, trading near its 52-week high with a price that is 96.62% of that peak.
While Toast is not currently profitable, with an adjusted operating income of -$117 million over the last twelve months, another InvestingPro Tip suggests that analysts predict the company will be profitable this year. This expectation of profitability could be a positive sign for investors, potentially offsetting concerns about insider sales.
It's worth noting that Toast does not pay a dividend to shareholders, which is common for growth-focused technology companies reinvesting in their operations. The company's price-to-book ratio of 12.67 indicates that investors are willing to pay a premium for Toast's growth potential and market position.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for Toast, providing a deeper understanding of the company's financial health and market performance.
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