’Reddit is built for this moment’ - Stock soars on crushed earnings
Stephen Fredette, President of Toast , Inc. (NYSE:TOST), recently sold shares of the company’s Class A common stock worth $28,000. The transactions, executed on March 12, involved the sale of 800 shares at a price of $35 each, close to the current trading price of $34.46. These sales were part of a pre-established Rule 10b5-1 trading plan adopted in December 2024. The stock has experienced significant volatility, with a -10.53% year-to-date return despite strong revenue growth of 28.33%. According to InvestingPro analysis, Toast appears slightly overvalued at current levels.
Following the transactions, Fredette holds 1,538,846 shares directly, with additional shares held indirectly through trusts. Notably, Fredette also possesses 25,722,670 shares of Toast’s Class B common stock, each convertible into one share of Class A stock. With Toast’s market capitalization at $18.75 billion, tracking insider movements becomes crucial for investors. Get comprehensive insider trading analysis and 10+ additional exclusive insights with InvestingPro’s detailed research reports.
In other recent news, Toast Inc. reported fourth-quarter earnings that exceeded expectations, prompting several analysts to adjust their outlooks for the company. DA Davidson raised its price target for Toast from $38 to $42, noting that the company’s revenue was 2% above their forecast and adjusted EBITDA was 16% higher than anticipated. Similarly, Mizuho (NYSE:MFG) Securities increased its price target from $40 to $45, maintaining an Outperform rating due to Toast’s strong financial results and optimistic 2025 forecast. Piper Sandler also reiterated a Neutral rating with a $35 price target, highlighting Toast’s significant growth in subscription and financial products gross profit and EBITDA margin expansion.
Toast’s initial guidance for 2025 projects a 23%-25% year-over-year growth in Non-GAAP FinTech & Subscription gross profit and a 37%-42% increase in adjusted EBITDA. The company plans to expand its investments internationally and in the food and beverage sector, which could impact margin expansion but is expected to enhance long-term growth. Analysts have noted the company’s strategic focus on strengthening its core small and midsize business segment and entering new markets.
Bernstein analysts have also weighed in on the broader payments sector, suggesting that companies like Toast could demonstrate resilience in a potential recession scenario. They anticipate that Toast may face high single-digit negative revisions on gross profit and double-digit EPS revisions due to its exposure to new business formation and discretionary spending. Despite these potential challenges, Toast’s recent financial performance and strategic initiatives have led to positive revisions in price targets and forecasts from multiple analyst firms.
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