Toast Inc. (NYSE:TOST) President Stephen Fredette recently sold a total of 3,810 shares of the company's Class A Common Stock, with the transactions amounting to nearly $98,000. The shares were sold at a price of $25.642 each, as reported in a recent SEC filing.
The sale took place on July 2, 2024, and was part of a series of transactions that involved the automatic conversion of restricted stock units (RSUs) into Class A Common Stock. The RSUs were converted on a one-for-one basis upon vesting and settlement. It was noted in the filing that the shares sold by Fredette were required to cover tax withholding obligations in connection with the vesting of RSUs. This indicates that the sale was not a discretionary trade by Fredette.
In addition to the sale, Fredette also acquired a significant number of shares through the vesting of RSUs. These acquisitions did not involve any monetary transaction, as the RSUs converted into shares of Class A Common Stock at no cost to the executive.
As of the date of the Form 4 filing, Stephen Fredette also owns a substantial number of shares of Toast Inc.'s Class B common stock. Each share of Class B common stock is convertible into one share of Class A common stock at any time, further adding to Fredette’s stake in the company.
Toast Inc., headquartered in Boston, Massachusetts, operates in the computer processing and data preparation sector. The company's stock is publicly traded and investors often monitor the buying and selling activity of company insiders as an indicator of corporate health and management confidence.
The transactions outlined in the SEC filing provide investors with insight into the financial moves of one of Toast Inc.'s key executives, reflecting a part of the ongoing financial management of his equity stakes in the company.
In other recent news, Toast Inc. has been the focus of numerous Wall Street analysts. RBC Capital maintains a "Sector Perform" rating with a price target of $27, citing the company's strategy to achieve more than 20% recurring gross profit growth annually and an adjusted EBITDA margin of 30–35% as a percentage of recurring gross profit. Similarly, Baird Equity Research set a price target of $28, while Keefe, Bruyette & Woods, Inc. rated Toast as "Market Perform" with a price target of $25.
Morgan Stanley (NYSE:MS) reaffirmed its confidence in the company by maintaining an Overweight rating and a $29.00 price target. Piper Sandler reiterated a Neutral rating with a $25.00 price target, and Needham maintained a Buy rating with a steady price target of $30.00. These recent developments reflect the company's strategic growth initiatives and financial performance.
Toast's growth strategies include scaling locations in its core restaurant market, expanding its total addressable market, increasing software Average Revenue Per User (ARPU), improving Fintech take-rate, and delivering operating leverage across the organization. These strategies aim to bolster Toast's recurring gross profit and adjusted EBITDA margin, which are pivotal financial metrics for the company.
InvestingPro Insights
Amidst the recent insider trading activity at Toast Inc. (NYSE:TOST), investors and analysts are closely monitoring the company's financial health and growth prospects. According to InvestingPro real-time data, Toast Inc. has a market capitalization of $14.43 billion, reflecting the company's substantial presence in the market. Despite a challenging Price/Earnings (P/E) ratio of -55.77, which indicates investor expectations of future earnings growth, the company has experienced significant revenue growth over the last twelve months, with an increase of 36.68%.
An InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, suggesting a positive outlook for the company's profitability. Additionally, in the last six months, Toast Inc. has seen a large price uptick of 46.81%, possibly indicating investor confidence and a bullish trend for the stock. It's also noteworthy that the company's liquid assets exceed its short-term obligations, providing financial stability and the ability to meet immediate liabilities.
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