Toast, Inc. (NYSE:TOST) President Stephen Fredette has recently sold a significant portion of his holdings in the company, according to the latest SEC filings. On September 18 and 19, 2024, Fredette sold a total of 40,948 shares of Class A Common Stock at prices ranging from $27.00 to $27.14, with the transactions amounting to a total of approximately $1.1 million.
The sales were conducted under a Rule 10b5-1 trading plan, which allows company insiders to sell shares at predetermined times to avoid accusations of insider trading. This plan had been adopted by Fredette on June 11, 2024. The reported prices represent weighted average prices, and the transactions were executed in multiple batches within the stated price range.
Following these transactions, Fredette's direct holdings in Class A Common Stock have decreased to 2,304,737 shares. Additionally, it's noted that through various family trusts, Fredette indirectly owns significant additional shares, including 177,500 shares by the Fredette Family Nominee Trust, 2,303,442 shares by the SHFA 2021 Nominee Trust, and 419,991 shares by the SHFA Family Trust.
Investors may find it noteworthy that as of the filing date, Stephen Fredette also owns an aggregate of 25,722,670 shares of Class B common stock of Toast, Inc., which can be converted into Class A shares at any time.
The filing was signed on behalf of Fredette by Monica Kleinman as his attorney-in-fact on September 20, 2024. Toast, Inc., headquartered in Boston, Massachusetts, specializes in computer processing and data preparation services, and continues to be a notable player in the technology sector.
In other recent news, Toast Inc. has exhibited robust growth and has upgraded its full-year financial outlook following a strong second quarter in 2024. The restaurant management platform provider reported significant growth in key financial metrics, including a record addition of 8,000 net new locations and a 29% year-over-year increase in recurring gross profit streams. Adjusted EBITDA reached $92 million, reflecting a healthy 27% margin on profit streams.
The company's fintech gross profit increased by 23% in Q2, with GPV rising to $40.5 billion, a 26% year-over-year growth. Furthermore, Toast Inc. has revised its full-year outlook upwards, projecting 27% to 29% growth in fintech and subscription gross profit, and adjusted EBITDA projections of $285 million to $305 million.
Despite a slight increase in churn rate and a 3% decline in GPV per location in Q2, the company remains optimistic about its growth potential. Toast Inc. plans to increase investment in key business areas in the second half of the year and aims to maintain breakeven on a GAAP basis for the remainder of the year. The company's management has reiterated their commitment to investing in AI to create value for customers and the ongoing execution of their business strategy. These are the recent developments in the company's operations.
InvestingPro Insights
The recent sale of shares by Toast, Inc. President Stephen Fredette has drawn attention to the company's financial performance and market valuation. An analysis of real-time data from InvestingPro reveals several key metrics that may interest investors in the context of this insider transaction.
As of the last twelve months ending Q2 2024, Toast, Inc. has a market capitalization of $15.15 billion, reflecting the market's valuation of the company. Despite not having turned a profit over the last twelve months, analysts are optimistic about Toast's future, expecting net income growth this year. This optimism is further supported by three analysts who have revised their earnings upwards for the upcoming period, suggesting potential improvements in the company's financial health.
Toast's revenue growth remains robust, with a 32.19% increase over the last twelve months as of Q2 2024, and a quarterly growth rate of 26.99%. Nevertheless, the company's gross profit margin is relatively weak at 22.66%, which could be a point of concern for efficiency-focused investors. On the liquidity front, Toast is in a favorable position as its liquid assets exceed its short-term obligations, indicating the company can meet its short-term financial liabilities.
Investors should also note that Toast's stock price has been quite volatile, and it is currently trading near its 52-week high, with a price that is 99.32% of this peak. While this could signal strong market confidence, it also means any investment at this level carries a higher risk of volatility. Additionally, Toast's price to book ratio stands at 12.15, which is relatively high and may suggest that the stock is priced at a premium compared to its book value.
For those interested in further insights, InvestingPro offers additional tips on Toast, Inc. which can be found at https://www.investing.com/pro/TOST. These tips provide a more comprehensive understanding of the company's financial health and market position.
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