Toast, Inc. (NYSE:TOST) President Stephen Fredette has sold a significant portion of his holdings in the company, according to recent filings. The transactions, which took place on September 10 and September 11, 2024, involved the sale of 211,686 and 98,426 shares of Class A Common Stock, respectively, amounting to a total of over $7.4 million.
On the first day of the transactions, Fredette sold shares at weighted average prices ranging from $23.210 to $23.775, with the total proceeds for the day's sales reaching approximately $4.99 million. The following day, he continued selling an additional 98,426 shares at prices between $25.00 and $25.01, resulting in proceeds of approximately $2.46 million.
These sales were conducted under a pre-arranged Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined schedule for buying and selling stocks at a time when they are not in possession of material non-public information. This plan had been adopted by Fredette on June 11, 2024.
In addition to these sales, the filings also disclosed a gift of 42,338 shares of Class A Common Stock, which was made on September 10, 2024, with no payment received in return. This transaction did not affect the total proceeds from the sales but is part of the overall changes in Fredette's holdings.
Following these transactions, Fredette still holds a significant stake in the company, with direct ownership of 2,597,685 shares of Class A Common Stock and indirect ownership through various trusts totaling 2,697,933 shares. Moreover, Fredette also owns an aggregate of 25,722,670 shares of Class B common stock, which is convertible into Class A stock.
Investors and market watchers often look to insider trading activity as an indicator of executives' confidence in the company's future performance. The sales by Fredette represent a notable change in his investment in Toast, Inc., and may be of interest to current and potential shareholders.
The transactions were publicly reported in compliance with SEC regulations, ensuring transparency in the trading activities of corporate insiders.
In other recent news, Toast Inc. reported impressive second-quarter 2024 results, demonstrating robust growth and exceeding expectations. The restaurant management platform provider added a record 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 healthy 27% margin. Given the strong performance in the first half of the year, Toast has uplifted its full-year financial outlook.
The company's recurring gross profit grew by 29% year-over-year to $344 million, and the SaaS ARR increased by 35% year-over-year. Fintech gross profit also saw a rise of 23% in the second quarter, with GPV escalating to $40.5 billion, marking a 26% year-over-year growth. Toast's full-year outlook now anticipates a 27% to 29% growth in fintech and subscription gross profit, with adjusted EBITDA projections ranging from $285 million to $305 million.
As part of its recent developments, Toast plans to enhance investment in key business areas in the latter half of the year. Adjusted EBITDA for Q3 is projected to be between $70 million and $80 million. Despite a slight increase in churn rate and a 3% decline in GPV per location in Q2, the company expects to maintain breakeven on a GAAP basis for the remainder of the year.
InvestingPro Insights
In light of the recent insider trading activity at Toast, Inc., it's worth considering some key financial metrics and analyst expectations that could provide a broader context for investors. According to InvestingPro data, Toast, Inc. has a market capitalization of approximately $14.05 billion, reflecting the company's current valuation in the market. Despite a challenging gross profit margin of 22.66% over the last twelve months as of Q2 2024, the company has experienced a solid revenue growth of 32.19% during the same period, indicating potential for future profitability.
InvestingPro Tips suggest that Toast, Inc. is expected to see net income growth this year, with analysts predicting the company will be profitable within the year. This is further supported by the fact that three analysts have revised their earnings estimates upwards for the upcoming period, signaling increased confidence in the company's earnings potential. However, investors should note that the stock has been trading at a high Price / Book multiple of 11.43, which could suggest that the stock is relatively expensive compared to the company's book value.
For those interested in delving deeper into Toast, Inc.'s financials and future prospects, InvestingPro offers additional tips on their platform. With a total of 9 InvestingPro Tips available, investors can gain a more comprehensive understanding of the company's financial health and market position. To explore these insights further, visit InvestingPro's dedicated page for Toast, Inc. at https://www.investing.com/pro/TOST.
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