Stephen Fredette, the President of Toast, Inc. (NYSE:TOST), recently executed a significant stock transaction. On October 16, Fredette sold 40,459 shares of Class A Common Stock at an average price of $29.042 per share, amounting to a total value of approximately $1.18 million. This transaction was conducted under a pre-established Rule 10b5-1 trading plan.
In addition to the sale, Fredette made a gift of 68,895 shares of Toast’s Class A Common Stock on October 17, as reported in the filing. This transfer was made without any financial consideration.
Following these transactions, Fredette retains ownership of 1,701,282 shares directly. Additionally, he holds indirect ownership through various trusts, including the Fredette Family Nominee Trust, SHFA 2021 Nominee Trust, and SHFA Family Trust, bringing his total holdings to several million shares. Furthermore, Fredette owns 25,722,670 shares of Class B common stock, which are convertible into Class A shares at any time.
In other recent news, Toast Inc. has demonstrated notable financial growth, particularly in its second quarter of 2024. The company reported a record addition of 8,000 net new locations, contributing to a 29% year-over-year increase in recurring gross profit streams. Adjusted EBITDA reached $92 million, marking a 27% margin on these profit streams. These positive results have led Toast to revise its full-year financial outlook upwards.
Financial firm Baird also updated its outlook on Toast Inc., raising the price target from the previous $28 to $30 while maintaining a Neutral rating. Baird’s analyst acknowledged the company’s potential but maintained a balanced risk/reward outlook. The firm’s projections suggest that Toast Inc.’s third-quarter recurring gross profit might be about 2% higher than the market consensus, primarily due to expected financial technology volume alignment with Street’s predictions.
These are the recent developments for Toast Inc. The company’s recurring gross profit grew by 29% year-over-year to $344 million, and SaaS ARR saw a 35% year-over-year increase. Baird anticipates a mild increase in the company’s guidance for the year 2024, reflecting the positive developments projected in the company’s financial performance.
InvestingPro Insights
Toast, Inc. (NYSE:TOST) has been experiencing significant growth and market attention, as reflected in both its financial metrics and stock performance. According to InvestingPro data, Toast’s revenue for the last twelve months as of Q2 2023 stood at $4.39 billion, with a robust revenue growth of 32.19% over the same period. This strong top-line performance aligns with the company’s market position and the recent insider transactions.
Despite the impressive revenue growth, Toast is currently not profitable, with an operating income of -$117 million for the last twelve months. However, an InvestingPro Tip suggests that net income is expected to grow this year, indicating potential improvement in the company’s bottom line. This expectation of profitability could be a factor influencing insider decisions, including Stephen Fredette’s recent stock sale and gift.
The stock’s performance has been noteworthy, with a 65.96% price total return over the past year. Toast is currently trading near its 52-week high, with the price at 98.86% of its highest point. This strong market performance may have presented an opportune moment for insiders to realize gains or rebalance their holdings.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Toast, providing a deeper understanding of the company’s financial health and market position. These insights can be particularly valuable when assessing the context of insider transactions like those executed by Stephen Fredette.
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