Toast Inc. President Stephen Fredette Sells Over $1.1 Million in Company Stock

Toast, Inc. (NYSE: TOST) President Stephen Fredette has recently divested a considerable amount of his shares in the company, according to recent SEC filings. On September 18 and 19, 2024, Fredette sold a total of 40,948 shares of Class A Common Stock at prices between $27.00 and $27.14, with the total transactions valued at approximately $1.1 million.

The sales were executed under a Rule 10b5-1 trading plan, which allows insiders to sell shares at predetermined intervals, thereby avoiding allegations of insider trading. Fredette established this plan on June 11, 2024. The prices reported are weighted averages, and the transactions occurred in multiple batches within the specified price range.

As a result of these transactions, Fredette’s direct holdings in Class A Common Stock have dropped to 2,304,737 shares. Additionally, he holds substantial amounts of shares indirectly through various family trusts, including 177,500 shares via the Fredette Family Nominee Trust, 2,303,442 shares through the SHFA 2021 Nominee Trust, and 419,991 shares from the SHFA Family Trust.

Notably, as of the filing date, Fredette also possesses a total of 25,722,670 shares of Class B Common Stock in Toast, Inc., which can be converted into Class A shares at his discretion.

The filing was submitted on September 20, 2024, on Fredette’s behalf by his attorney-in-fact, Monica Kleinman. Toast, Inc., based in Boston, Massachusetts, specializes in computer processing and data preparation services and remains a significant player in the technology sector.

In other developments, Toast Inc. has demonstrated impressive growth and has revised its full-year financial expectations following a successful second quarter in 2024. The restaurant management platform reported considerable gains in key financial metrics, including the addition of 8,000 net new locations and a 29% year-over-year increase in recurring gross profit streams. The adjusted EBITDA was recorded at $92 million, marking a healthy 27% margin.

The company’s fintech gross profit saw a 23% increase in Q2, with gross payment volume (GPV) rising to $40.5 billion, a 26% increase from the previous year. Toast has also upgraded its full-year outlook, projecting a 27% to 29% increase in fintech and subscription gross profit, alongside adjusted EBITDA expectations ranging from $285 million to $305 million.

Despite a slight increase in churn rate and a 3% decline in GPV per location in the second quarter, Toast remains bullish about its growth prospects. The company intends to ramp up investments in key business areas during the latter half of the year and aims to maintain breakeven on a GAAP basis. Management has reaffirmed its commitment to investing in artificial intelligence to enhance customer value and driving forward its business strategy.

The recent share sales by President Stephen Fredette have attracted attention to a range of financial and market metrics that investors may find relevant. As of the end of Q2 2024, Toast, Inc. boasts a market capitalization of $15.15 billion. Analysts remain optimistic about the company’s future, anticipating growth in net income, despite Toast not being profitable in the past twelve months. This positive outlook is further bolstered by a consensus among analysts who have adjusted their earnings estimates upward for the upcoming quarters.

Toast’s revenue growth remains strong, achieving a 32.19% increase over the past twelve months and a quarterly growth rate of 26.99%. However, the company’s gross profit margin is relatively low at 22.66%, which could be a concern for investors focused on efficiency. On a liquidity basis, Toast’s liquid assets exceed its short-term obligations, indicating that the company can meet its short-term financial commitments.

Investors should also be aware of the volatility in Toast’s stock price, which is currently near its 52-week high, with a price reflecting 99.32% of this peak. While this can indicate strong market confidence, it also implies that investments at this level may carry a heightened risk of volatility. Furthermore, the company’s price-to-book ratio stands at 12.15, suggesting that the stock may be priced at a premium relative to its book value.

This analysis offers a snapshot of Toast, Inc.’s recent activities and financial performance, providing insights for potential investors.