Toast Inc. (NYSE:TOST), a leader in the computer processing and data preparation industry, recently saw significant stock activity from one of its directors. According to the latest filings, Richard Kent Bennett, a director at Toast Inc., sold a substantial amount of Class A Common Stock over two days.
On September 12, 2024, Bennett sold shares at a weighted average price of $26.08, with transactions ranging from $26.06 to $26.11 per share. The following day, he continued selling shares at a weighted average price of $26.22, with prices spanning from $26.00 to $26.52 per share. The total value of the shares sold across these two days was notably high, reflecting a significant transaction for both Bennett and the company.
The exact number of shares sold and the total dollar amount of the sales were not disclosed in the filing. However, the footnotes indicate that the shares sold were part of a larger holding by Bessemer Venture Partners’ funds, in which Bennett has an indirect, passive economic interest. The footnotes also clarify that Bennett disclaims beneficial ownership of these securities, except to the extent of his pecuniary interest through his indirect interest in the funds.
Following these transactions, Bennett still indirectly holds a sizable number of shares in the company, with the Bessemer funds owning millions of shares of Class B Common Stock, which are convertible into Class A shares.
Investors often monitor insider transactions as they can provide insights into how executives and directors view the company’s stock value. While the reasons behind Bennett’s sale are not disclosed, the transactions are part of the public record and provide transparency into the trading activities of Toast Inc.’s insiders.
Toast Inc. continues to be a closely watched company in the tech sector, and movements like these are of interest to both current and potential investors.
In other recent news, Toast Inc. reported impressive second-quarter 2024 results, with significant growth in key financial metrics and a raised full-year outlook. The company added a noteworthy 8,000 net new locations, contributing to a 29% year-over-year increase in recurring gross profit streams. Adjusted EBITDA reached $92 million, indicating a healthy 27% margin on these profit streams, and the company achieved GAAP income profitability earlier than expected.
Toast Inc. anticipates increasing investment in key business areas in the second half of the year. However, a slight increase in churn rate has been observed, now slightly above 10%. Despite this, the company expects the impact on ARR to remain low.
The company’s core U.S. SMB and mid-market business significantly contributed to the net additions. Toast Inc. also sees substantial opportunities for legacy system replacement in the enterprise segment and retail, with international markets presenting growth potential. The company has plans to add sales capacity in international retail. These are among the recent developments at Toast Inc.
InvestingPro Insights
Toast Inc. (NYSE:TOST) has been under the investor’s microscope recently, and not just because of insider trading activity. The company’s financial performance and stock valuation metrics provide a broader picture of its current market position. Here are some insights based on the latest data from InvestingPro:
InvestingPro Data shows that Toast Inc. has a market capitalization of $14.72 billion, reflecting its significant presence in the computer processing and data preparation industry. Despite a negative P/E ratio of -87.34, indicating that the company has not been profitable over the last twelve months, analysts are optimistic about its future. They predict that net income is expected to grow this year, as evidenced by three analysts who have revised their earnings upwards for the upcoming period (InvestingPro Tip #0 and #1).
In terms of stock performance, Toast Inc. has experienced a significant return over the last week, with a 10.6% increase in its price total return, and an even stronger return over the last three months at 15.88% (InvestingPro Tip #2 and #8). This demonstrates investor confidence and a positive market trend for the company’s shares.
However, potential investors should be aware of certain challenges. The company’s gross profit margins are currently weak at 22.66%, which could signal efficiency issues in managing its costs (InvestingPro Tip #3). Additionally, Toast Inc. trades at a high Price / Book multiple of 11.64, which might suggest that the stock is priced optimistically compared to its book value (InvestingPro Tip #7).
For those seeking more detailed insights, InvestingPro offers a wealth of additional tips. Currently, there are 11 more InvestingPro Tips available for Toast Inc. at which can provide investors with a deeper understanding of the company’s financial health and stock performance.
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