- Toast (TOST), a provider of restaurant sales and management software, has seen a significant surge in stock value following a better-than-expected Q1 earnings report.
- The company’s stock value has risen by 47% in 2024, with a recent surge of over 11% to $26.37.
- Toast’s Q1 revenue rose 31% to $1.075 billion, surpassing estimates of $1.048 billion, with EBITDA coming in at $57 million, significantly beating estimates of $25.2 million.
Toast, a leading restaurant software provider, sees a significant surge in stock value following a strong Q1 earnings report, with a 31% rise in revenue and a robust EBITDA.
Toast Stock Investor Day
The company plans to host an investor day on May 29, where it is expected to discuss long-term financial goals. Prior to the Q1 earnings report, Toast stock owned a 25.63 cup-with-handle buy point. With Wednesday’s surge, Toast stock broke out past that buy point and remained within a 5% buy zone ending at 26.96. IBD Leaderboard added Toast as an earnings option play on Tuesday.
Restaurant Locations Expanding For Toast Stock
According to a report by Morgan Stanley analyst Josh Baer, Toast has been successful in expanding its restaurant locations. In Q1, Toast added over 6,000 net new locations, reaching 112,000 overall, up 32% year-over-year. The company’s main competitors include Square-parent Block (SQ), Fiserv’s (FIS) Clover, Shift4 (FOUR), Lightspeed, TouchBistro and SpotOn.
Toast Co-Founders Set IPO
Co-founders Chris Comparator, Steve Fredette and Aman Narang worked at Endeca, a business intelligence software firm. Oracle acquired Endeca in 2011. Comparator stepped down as chief executive in September 2023, with Narang taking the helm. The company was founded in 2012, but Toast stock didn’t go public until September 2021. The initial public offering raised $870 million.
Acquisitions Expand Product Offerings
In 2020, the company rolled out Toast Capital, which provides loans to restaurants. In addition, Toast has also been active in making acquisitions. In 2019 Toast bought StratEx for $44 million. Chicago-based StratEx provides human resources and payroll software. In 2021, Toast acquired XtraChef for $48 million. XtraChef sells supplier management software. Then in 2022, Toast bought Sling. Sling’s employee scheduling software allows workers to change shifts and communicate with colleagues.
Conclusion
Toast’s strong Q1 earnings report and subsequent surge in stock value highlight the company’s growth and potential. With plans for an investor day, expansion of restaurant locations, and strategic acquisitions, Toast is positioned for continued success in the restaurant software market.
