Toast Inc. (TOST) is looking forward to a strong quarter

Toast Inc. (NYSE: TOST) stock jumped 3.34% on Tuesday to $17.95 against a previous-day closing price of $17.37. With 3.61 million shares changed hands, the volume of the stock remained lighter than its average volume of 5.17 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $18.26 whereas the lowest price it dropped to was $17.56. The 52-week range on TOST shows that it touched its highest point at $69.93 and its lowest point at $11.91 during that stretch. It currently has a 1-year price target of $24.10.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TOST was down-trending over the past week, with a drop of -3.65%, but this was down by -4.11% over a month. Three-month performance surged to 28.77% while six-month performance fell -6.66%. The stock lost -67.30% in the past year, while it has lost -48.29% so far this year. A look at the trailing 12-month EPS for TOST yields -0.65 with Next year EPS estimates of -0.24. For the next quarter, that number is -0.09. This implies an EPS growth rate of -237.40% for this year and -9.10% for next year.

Float and Shares Shorts:

At present, 509.53 million TOST shares are outstanding with a float of 281.12 million shares on hand for trading. On Aug 30, 2022, short shares totaled 11.61 million, which was 2.25% higher than short shares on Jul 28, 2022. In addition to Mr. Christopher P. Comparato as the firm’s Chairman, CEO & Director, Mr. Stephen Fredette serves as its Co-Founder, Co-Pres & Director.

Institutional Ownership:

Through their ownership of 73.66% of TOST’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 37.63% of TOST, in contrast to 24.72% held by mutual funds. Shares owned by individuals account for 10.25%. As the largest shareholder in TOST with 12.59% of the stake, T. Rowe Price Associates, Inc. holds 40,755,189 shares worth 40,755,189. A second-largest stockholder of TOST, The Vanguard Group, Inc., holds 22,031,489 shares, controlling over 6.80% of the firm’s shares. HMI Capital Management LP is the third largest shareholder in TOST, holding 15,787,586 shares or 4.88% stake. With a 7.48% stake in TOST, the T Rowe Price New Horizons Fund is the largest stakeholder. A total of 24,222,390 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.24% of TOST stock, is the second-largest Mutual Fund holder. It holds 7,258,226 shares valued at 137.4 million. Vanguard Extended Market Index Fu holds 1.02% of the stake in TOST, owning 3,311,659 shares worth 62.69 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, TOST reported revenue of $675.00M and operating income of -$99.00M. Over the past year, revenue came in at $2.21B while operating income stood at -$371.00M. It generated -$54.00M net income for the quarter, which came to -$330.00M over the last twelve months. The EBITDA in the recently reported quarter was -$137.00M and diluted EPS was -$0.11. EBITDA for the full year was -$470.00M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TOST since 18 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TOST analysts setting a high price target of $29.00 and a low target of $19.00, the average target price over the next 12 months is $24.10. Based on these targets, TOST could surge 61.56% to reach the target high and rise by 5.85% to reach the target low. Reaching the average price target will result in a growth of 34.26% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TOST will report FY 2022 earnings on 02/14/2023. Analysts have provided yearly estimates in a range of -$0.08 being high and -$0.79 being low. For TOST, this leads to a yearly average estimate of -$0.28. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Toast Inc. surprised analysts by $0.01 when it reported -$0.11 EPS against a consensus estimate of -$0.12. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is -$0.04 and the low estimate is -$0.12. The average estimate for the next quarter is thus -$0.08.

Summary of Insider Activity:

Insiders traded TOST stock several times over the past three months with 13 Buys and 13 Sells. In these transactions, 4,691,938 shares were bought while 6,941,830 shares were sold. The number of buy transactions has increased to 69 while that of sell transactions has risen to 92 over the past year. The total number of shares bought during that period was 57,234,306 while 36,658,622 shares were sold.

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