Stephen Fredette, President of Toast, Inc. (NYSE: TOST), a prominent player in the computer processing and data preparation industry, has recently sold a significant amount of company stock. On September 12, 2024, Fredette sold a total of 101,574 shares of Toast's Class A common stock, generating over $2.6 million in proceeds.
The transactions were executed in multiple parts, with a portion of 70,475 shares being sold at a weighted average price of $25.566, and another 31,099 shares at a weighted average of $26.094. The prices for these sales varied, with the range for the first batch being from $25.00 to $25.96 per share, and from $26.01 to $26.20 for the second batch.
Following these transactions, Fredette's direct holdings in Toast, Inc. decreased but remained substantial, with a total of 2,395,685 shares still under his name. Additionally, indirect holdings through various family trusts amounted to a notable sum, including 177,500 shares held 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.
It's important to note that these sales were conducted in accordance with a Rule 10b5-1 trading plan, which Fredette had adopted earlier on June 11, 2024. This plan allows company insiders to sell shares at predetermined times to avoid any potential accusations of trading on nonpublic information.
In addition to the sales, Fredette also made a bona fide gift of 50,000 shares of Class A common stock, which did not involve any monetary transaction. As of the filing date, he also owns 25,722,670 shares of Toast's Class B common stock, which can be converted to Class A shares at any time.
Investors and followers of Toast, Inc. often keep a close eye on insider transactions as they may provide insights into the executives' perspectives on the company's current valuation and future prospects.
In other recent news, Toast Inc. reported strong second-quarter 2024 results, exceeding expectations with key financial metrics indicating robust growth. The company added a record 8,000 net new locations, leading to a year-over-year increase of 29% in recurring gross profit streams. Adjusted EBITDA reached $92 million, marking a healthy 27% margin on these profit streams. Based on the impressive performance in the first half of the year, Toast has upgraded its full-year financial outlook.
Recent developments also include a 35% year-over-year increase in SaaS ARR and a 24% rise in payments ARR. Fintech gross profit rose by 23% in the second quarter, and GPV grew to $40.5 billion, a 26% year-over-year growth. Toast's full-year outlook has been adjusted to reflect 27% to 29% growth in fintech and subscription gross profit, with adjusted EBITDA projections ranging from $285 million to $305 million.
While the company anticipates a slower pace of buybacks for the rest of the year, share repurchase activities have included $49 million in shares year-to-date and a warrant repurchase for 5.2 million shares at $60 million. Analysts note that Toast plans to increase investment in key business areas in the second half of the year and expects to maintain breakeven on a GAAP basis for the remainder of the year.
InvestingPro Insights
As investors consider the implications of Stephen Fredette's recent stock sale, attention turns to the financial health and performance metrics of Toast, Inc. According to InvestingPro data, Toast boasts a market capitalization of $14.66 billion, reflecting its significant presence in the industry. The company's revenue has shown robust growth, with a 32.19% increase over the last twelve months as of Q2 2024, signaling strong demand for its offerings.
InvestingPro Tips suggest a mixed picture for Toast. On the one hand, analysts are optimistic, having revised earnings upwards for the upcoming period and predicting the company will be profitable this year. This is further supported by the company's significant return over the last week, with a price total return of 12.02%. On the other hand, Toast's stock price movements are known to be quite volatile, which could be a point of consideration for risk-averse investors. Moreover, the company's gross profit margins are relatively weak at 22.66%, which may indicate challenges in maintaining profitability compared to industry peers.
The company does not pay a dividend to shareholders, which might be a factor for those seeking regular income from their investments. However, it is worth noting that Toast's liquid assets exceed its short-term obligations, suggesting financial stability in meeting immediate liabilities. For readers interested in a deeper analysis, there are additional InvestingPro Tips available, which can offer more nuanced insights into the company's financial outlook.
With the next earnings date scheduled for November 5, 2024, investors will be watching closely to see if the company's financial performance aligns with the analysts' positive revisions and whether the anticipated profitability materializes as forecasted.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.