Toast Inc (TOST) Options

TOST

Cpps @ 18.73

Gap @ 16.15

I say you can enter around 4-6.00 range. Then it’s a long hold

Tonight we fly to the moon. I’m so ready. Need to book my flight. Toast is the best stock ever and I’m fully booked loaded and ready to travel. Ticket please. Boarding pass please. Take your seat you dummie dumb dum dummies how do you spell dummy ?

What ? Say what ? Talk English please. You are stupid. What are you trying to say ? Bunch of gibberish garbage trash talk you fool. Try to make some sense.

Let's secure that retirement bag, folks! $TOST is your restaurant savior, $BRZE is riding the CRM growth wave, and $NET is straight-up blowing up!

Oh no. We are toast.

Toast is the real deal, patience here is going to payoff, dont get caught up in the day to day fluctuations.

Nice buy

(Toast stock heats up after earnings as company hits a milestone)-

Toast Inc. beat revenue expectations for the latest quarter and logged positive free cash flow for the first time since its IPO. The company reported a second-quarter net loss of $98 million, or 19 cents per share, compared to a loss of $54 million in the year-prior period. Toast also recorded adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $15 million, compared to a loss of $33 million a year prior. The company posted free cash flow of $39 million, its first positive performance since Toast went public two years ago. CEO Chris Comparato expressed confidence in Toast's ability to penetrate the entire restaurant total addressable market. Revenue jumped to $978 million from $675 million, while the FactSet consensus was for $943 million. The stock was up 11% in Tuesday's extended session. For the third quarter, Toast estimates $1.01 billion to $1.04 billion in revenue, while the FactSet consensus was for $1.00 billion.

TOST is expected to experience a pump and dump pattern in six months. As a long-term holder, I don't care about the price, as it will be over $75 by then. The question is where it will support, with a potential $18 support.

Toast to remove 99-cent fee after widespread backlash.

Good, now I started a small position, will avg. down on next pump, lol

Josh's pump now in the toster getting toasted this morning.

Toast, a Big Tech vendor, has suddenly imposed new costs on millions of Americans, prompting a Senate inquiry.

Toast announces an agreement with Marriott for hotel restaurant technology.

An exciting agreement with Marriott International has been announced by Toast, a digital technology platform geared towards restaurants. With the help of this agreement, food and beverage establishments in Marriott's Select service hotels in the US and Canada will have access to the Toast for Hotel Restaurants technology.
This agreement is evidence of Toast's unwavering dedication to providing technology solutions tailored to the particular requirements of the hospitality sector. In order to improve customer experiences, streamline operations, and ultimately boost revenue, Toast for Hotel Restaurants technology was created.
With the help of this technology, hotel restaurants can control orders, payments, and menus from a single platform. They also have access to real-time analytics and reporting, which makes it simpler for them to manage their business.
It is anticipated that Toast and Marriott's agreement will benefit both parties. It will assist Toast in growing its clientele in the hospitality sector and improve the dining experience for Marriott's visitors. Overall, this collaboration represents a significant advancement for both businesses.

Toast is moving toward profitability, with nearly 40% revenue growth projected for fiscal 2023, followed by sales growth in the high 20s in fiscal 2024. The company is also expanding into other countries, like the U.K. and Canada. It certainly has the balance sheet to get to the point of producing positive cash flow, with nearly $1 billion of cash and marketable securities on its balance sheet and no debt. The valuation is under three times annual revenues before taking net cash into consideration.

Toast potential is endless as there continues to be a growing demand for digital products and services in the restaurant industry. With cutting-edge tools that help restaurants streamline their operations, capitalize on valuable insights, and boost sales through enhanced customer experiences, Toast is undoubtedly a solid investment for future gains.

Shares of TOST opened at $17.97 on Friday, with a 50-day moving average of $18.97 and a 200-day moving average of $19.06. This implied stock price indicates that investors have some degree of confidence in the value proposition presented by the company, even though it has faced some setbacks in recent times.

I think that the real opportunity for Toast seems to be in subscription services. With a gross margin of 65%, it certainly could be more lucrative. And this is the part of the business that's growing the fastest. Revenue for the subscription services business segment jumped 92% year over year in 2022.

Toast is quickly gaining widespread adoption in the restaurant space, outpacing the growth of important competitors, including Olo. That indeed bodes well for the company's growth potential. Of its various revenue streams, the most profitable ones are growing the fastest.

Toast Inc. shares were building on their massive Thursday rally in the aftermarket as the maker of payment software and technology for the restaurant industry gave an upbeat forecast for the current quarter.
The company posted a third-quarter net loss of $98 million, or 19 cents a share, compared with a loss of $254 million, or $1.06 a share, in the year-earlier quarter.

TOST announced that it will release financial results for the third quarter ended September 30, 2022 following the close of the U.S. markets on Thursday, November 10, 2022.The news release with financial results and a link to the conference call will be accessible at the Toast investor relations website https://investors.toasttab.com.

(TOST) Stock to Rise After It Is Up 25.56% in a Month

Wall Street is positive on Toast Inc (TOST). On average, analysts give TOST a Buy rating. The average price target is $29.166, which means analysts expect the stock to climb by 33.73% over the next twelve months. That average ranking earns TOST an Analyst Rating of 32, which is better than 32% of stocks. Toast Inc (TOST) stock is trading at $21.81 as of 3:24 PM on Tuesday, Oct 25, a rise of $1.19, or 5.77% from the previous closing price of $20.62. The stock has traded between $20.87 and $21.94 so far today. Volume today is below average. So far 3,200,923 shares have traded compared to average volume of 5,319,744 shares.

(TOST) Stock to Rise After It Is Up 25.56% in a Month

Wall Street is positive on Toast Inc (TOST). On average, analysts give TOST a Buy rating. The average price target is $29.166, which means analysts expect the stock to climb by 33.73% over the next twelve months. That average ranking earns TOST an Analyst Rating of 32, which is better than 32% of stocks. Toast Inc (TOST) stock is trading at $21.81 as of 3:24 PM on Tuesday, Oct 25, a rise of $1.19, or 5.77% from the previous closing price of $20.62. The stock has traded between $20.87 and $21.94 so far today. Volume today is below average. So far 3,200,923 shares have traded compared to average volume of 5,319,744 shares.

Toast Launches Invoicing to Help Restaurants Grow Their Catering and Events Business

Toast Invoicing integrates directly with a restaurant’s menu in Toast, so they can simply itemize invoices from their existing menu. It also allows restaurants to accept tips with an invoice and digitally distribute them to staff using Toast Payroll & Team Management. Toast customers have the ability to send an invoice from any device, not just their point of sale system. They can set payment due dates and reminders as well as collect and redeem deposits. Through Toast Invoicing, a restaurant’s customer has the flexibility to pay online at any time.

Toast Could Be Profitable by 2023, Says Analyst. The Stock Is Upgraded to Buy. Toast could reach profitability in 2023, a year ahead of what Wall Street expects, according to an analyst from Mizuho Securities.

If people haven't figured it out yet, check out the recent financials. One of the main income producing revenue items is it's financial services. These are short term loans provided to their customers in which they charge a set fee, while tapping 13.2% off their daily credit card receipts processed nightly until the loan is paid off plus interest. Don't get me wrong, this is a great service for seasonal businesses facing the same fixed costs, less income and higher variable costs especially given inflation, and supply shortages. But, it is no different than a check cashing/loan service with a more secured clientele base.

It's genius!

TOST chart

$TOST: Getting Analyst UPGRADES all over the place today


Now at $56






Lost count of how many already


GO $TOST



***********************************************************



Toast initiated with a Neutral at JPMorgan
$TOST



Toast initiated with an Outperform at William Blair
$TOST

Toast initiated with an Outperform at William Blair
$TOST



Toast initiated with a Neutral at JPMorgan
$TOST
Tip



Toast initiated with an Overweight at Piper Sandler
$TOST


Toast initiated with an Overweight at Piper Sandler
$TOST



Needham initiated coverage on Toast with a new price target

I got in on the IPO offering at $40. Been using Toast for over 7 years.

I got in on the IPO offering at $40. Been using Toast for over 7 years.

Very good synopsis!

TOST

$TOST: $685Milly IPO today


https://twitter.com/SeekingAlpha/status/1438206467811602432?s=20



GO $TOST



*************************************************************************


IPO Update: Toast Proposes Terms For $685 Million IPO
Sep. 15, 2021 2:21 PM ETToast, Inc. (TOST)2 Likes
Summary
Toast has filed to raise $685 million in an IPO of its Class A common stock.
The firm provides an integrated software solution to restaurants.
TOST has grown sharply during the pandemic and the IPO appears reasonably valued, so is worth a close look.
Looking for more investing ideas like this one? Get them exclusively at IPO Edge. Learn More »
customer contactless payment for drink with mobile phon at cafe counter bar,seller coffee shop accept payment by mobile.new normal lifestyle concept
Weedezign/iStock via Getty Images
Quick Take
Toast (TOST) has filed to raise $685 million from the sale of its Class A common stock in an IPO, according to an amended registration statement.

The company offers restaurant payment and management software in the United States and other countries.

TOST’s IPO valuation expectations appear reasonable given its strong top line revenue growth rate, so the IPO is worth consideration.

Company & Technology
Boston, Massachusetts-based Toast was founded to develop a SaaS platform to process payments for restaurants via a mobile app, hardware system, and third-party providers.

Management is headed by Chief Executive Officer Christopher P. Comparato, who has been with the firm since February 2015 and was previously head of Customer Success at Acquia and Endeca Technologies.

Below is a brief overview video of how the system works:


(Source)

The company’s primary offerings include:

Point of sale

Restaurant operations

Digital ordering & delivery

Marketing & loyalty

Team management

Toast has received at least $849 million in equity investment from investors including Bessemer Venture Partners, T. Rowe Price Funds, TCV (Technology Crossover Ventures), Technology Investment Dining Group, and Tiger Global.

Customer/User Acquisition
The firm pursues relationships with medium and large restaurant operators through its direct sales force.

The company has four primary revenue streams:

Subscription services

Financial technology solutions

Hardware

Professional services

Sales and Marketing expenses as a percentage of total revenue have dropped materially as revenues have increased, as the figures below indicate:

Sales and Marketing

Expenses vs. Revenue

Period

Percentage

Six Mos. Ended June 30, 2021

10.5%

2020

16.9%

2019

19.4%

(Source)

The Sales and Marketing efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing spend, rose sharply in the most recent reporting period, as shown in the table below:

Sales and Marketing

Efficiency Rate

Period

Multiple

Six Mos. Ended June 30, 2021

4.9

2020

1.1

(Source)

The Rule of 40 is a software industry rule of thumb that says that as long as the combined revenue growth rate and EBITDA percentage rate equal or exceed 40%, the firm is on an acceptable growth/EBITDA trajectory.

TOST’s most recent calculation was 97% for the six months ended June 30, 2021, so the firm has performed extremely well in this regard, per the table below:

Rule of 40

Calculation

Recent Rev. Growth %

105%

EBITDA %

-8%

Total

97%

(Source)

The firm’s dollar-based net revenue retention rate for the year ended June 30, 2021 was 110%, a solid result.

The dollar-based net revenue retention rate metric measures how much additional revenue is generated over time from each cohort of customers, so that a figure over 100% means that the company is generating more revenue from the same customer cohort over time, indicating good product/market fit and efficient sales and marketing efforts.

Market & Competition
According to a 2018 market research report by Grand View Research, the global restaurant management software market is forecast to reach nearly $7 billion by 2025.

This represents a forecast CAGR of 14.6% from 2019 to 2025.

The main drivers for this expected growth are a growing awareness by restaurant operators of the benefits of increased efficiencies from software systems.

Also, the COVID-19 pandemic will bring forward significant demand for integrated restaurant management systems in order to streamline processes while providing restaurant services in a more omnichannel approach to customers.

Major competitive or other industry participants include:

Square (NYSE:SQ)

TouchBistro

Clover Network

Lightspeed POS (NASDAQ:LSPD)

Oracle/MICROS (NYSE:ORCL)

NCR (NYSE:NCR)

PAR Technology (NYSE:PAR)

Heartland Payment Systems

Shift4 Payments (NYSE:FOUR)

Fiserv (NASDAQ:FISV)

FreedomPay

Olo (NYSE:OLO)

Others

Financial Performance
Toast’s recent financial results can be summarized as follows:

Sharply higher top line revenue growth

Increasing gross profit and gross margin

Fluctuating and high operating losses

Dropping negative operating margin

A swing to positive cash flow from operations

Below are relevant financial results derived from the firm’s registration statement:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

Six Mos. Ended June 30, 2021

$ 703,748,000

104.7%

2020

$ 823,134,000

23.8%

2019

$ 665,029,000

Gross Profit (Loss)

Period

Gross Profit (Loss)

% Variance vs. Prior

Six Mos. Ended June 30, 2021

$ 154,774,000

244.0%

2020

$ 140,413,000

125.2%

2019

$ 62,349,000

Gross Margin

Period

Gross Margin

Six Mos. Ended June 30, 2021

21.99%

2020

17.06%

2019

9.38%

Operating Profit (Loss)

Period

Operating Profit (Loss)

Operating Margin

Six Mos. Ended June 30, 2021

$ (56,824,000)

-8.1%

2020

$ (220,147,000)

-26.7%

2019

$ (213,367,000)

-32.1%

Net Income (Loss)

Period

Net Income (Loss)

Six Mos. Ended June 30, 2021

$ (234,650,000)

2020

$ (249,015,000)

2019

$ (209,448,000)

Cash Flow From Operations

Period

Cash Flow From Operations

Six Mos. Ended June 30, 2021

$ 51,218,000

2020

$ (124,633,000)

2019

$ (126,483,000)

(Glossary Of Terms)

(Source)

As of June 30, 2021, Toast had $376.1 million in cash and $462.4 million in total liabilities.

Free cash flow during the twelve months ended June 30, 2021, was $7.0 million.

IPO Details
TOST intends to sell 21.7 million shares of Class A common stock at a proposed midpoint price of $31.50 per share for gross proceeds of approximately $685 million, not including the sale of customary underwriter options.

No existing shareholders have indicated an interest to purchase shares at the IPO price.

Class A common stockholders will receive one vote per share and Class B stockholders will receive ten votes per share.

The S&P 500 Index no longer admits firms with multiple classes of stock into its index.

Assuming a successful IPO at the midpoint of the proposed price range, the company’s enterprise value at IPO (ex-underwriter options) would approximate $14.7 billion.

Excluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 4.35%. A figure under 10% is generally considered a ‘low float’ stock which can be subject to significant price volatility.

Per the firm’s most recent regulatory filing, it plans to use the net proceeds as follows:

As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, we may use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies. However, we do not have agreements or commitments for any material acquisitions or investments at this time.

(Source)

Management’s presentation of the company roadshow is available here.

Regarding outstanding legal proceedings, management said it is not a party to any legal proceeding that would have a material effect on its operations or financial condition.

Listed bookrunners of the IPO are Goldman Sachs, Morgan Stanley, J.P. Morgan, and other investment banks.

Valuation Metrics
Below is a table of the firm’s relevant capitalization and valuation metrics at IPO, excluding the effects of underwriter options:

Measure [TTM]

Amount

Market Capitalization at IPO

$15,728,979,452

Enterprise Value

$14,708,887,452

Price / Sales

13.30

EV / Revenue

12.43

EV / EBITDA

-96.52

Earnings Per Share

-$0.71

Float To Outstanding Shares Ratio

4.35%

Proposed IPO Midpoint Price per Share

$31.50

Net Free Cash Flow

$7,001,000

Free Cash Flow Yield Per Share

0.04%

Revenue Growth Rate

104.67%

(Glossary Of Terms)

(Source)

As a reference, a potential public comparable would be Olo (OLO); shown below is a comparison of their primary valuation metrics:

Metric

Olo (OLO)

Toast (TOST)

Variance

Price / Sales

10.21

13.30

30.2%

EV / Revenue

34.06

12.43

-63.5%

EV / EBITDA

-197.26

-96.52

-51.1%

Earnings Per Share

-$0.73

-$0.71

-2.1%

Revenue Growth Rate

94.2%

104.67%

11.16%

(Glossary Of Terms)

(S-1/A and Seeking Alpha)

Commentary
TOST is going public to provide a public market for its stock and for its future unspecified corporate expansion initiatives.

TOST’s financials show significantly higher top line revenue growth, growing gross profit and gross margin, high and variable operating losses, lowered negative operating margin but a swing to positive cash flow from operations.

Free cash flow for the twelve months ended June 30, 2021 was only $7.0 million.

Sales and Marketing expenses as a percentage of total revenue have dropped as revenue has increased and its Sales and Marketing efficiency rate rose sharply to 4.9x in the most recent six-month reporting period.

The firm’s Rule of 40 performance has been impressive, at 97%, and its current dollar-based net retention rate was 110%, a solid result.

The market opportunity for providing restaurant software is large and expected to grow substantially in the coming years as the restaurant industry modernizes in the wake of the COVID-19 pandemic’s negative effects on its in-store dining business.

Goldman Sachs is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 37.3% since their IPO. This is a mid-tier performance for all major underwriters during the period.

The primary risk to the company’s outlook is consumer behavior shifting back toward in-restaurant dining from online ordering and delivery, reducing activity for these behaviors as the effects of the pandemic wane.

As for valuation, compared to competitor Olo, TOST’s IPO valuation expectations appear reasonable given its higher top line revenue growth rate, so the IPO is worth consideration.

Expected IPO Pricing Date: September 21, 2021.


Gain Insight and actionable information on U.S. IPOs with IPO Edge research.

Members of IPO Edge get the latest IPO research, news, and industry analysis.

Get started with a free trial!

This article was written by

Donovan Jones profile picture.
Donovan Jones
17.22K Followers
Author of
IPO Edge
Get IPO Edge with actionable research on next-generation high growth stocks
https://seekingalpha.com/author/donovan-jones/research
IPOs, Tech

Contributor Since 2013

I'm the founder of IPO Edge on Seeking Alpha, a research service for investors interested in IPOs on US markets. Subscribers receive access to my proprietary research, valuation, data, commentary, opinions, and chat on all U.S. IPOs. Join now to get an insider's 'edge' on new issues coming to market, both before and after the IPO. Start with a 14-day Free Trial.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Investing in IPOs is an inherently volatile and opaque endeavor. My research is focused on identifying quality IPO companies at a reasonable price, but I’m wrong sometimes. I analyze fundamental company performance and my conclusions may not be relevant for first-day or early IPO trading activity, which can be highly volatile and unrelated to company fundamentals. This report is intended for educational purposes only and is not financial, legal or investment advice.

2 Likes

Like This Article

Share

Print
Comment
Recommended For You
Comments
Sort byNewest
About This Article
Ticker Covered
TOST
Author's rating at publication
Bullish
Author's Rating History
Author's full rating history »
TOST Ratings
SA Author
Not Covered
-
Wall Street
Not Covered
-
Quant
Not Covered
-
More on TOST

The Toast IPO Looks Like A Steal
Toast attracts interest in week ahead of the restaurant tech player's IPO
Toast Inc. unveils terms for IPO that could value restaurant-tech firm at $16B+ (update)

Toast Pursues $100 Million U.S. IPO
SA Connect
?
T Rowe Price
ETRADE


Voyager
SA Marketing