1. Toast, Inc. (NYSE:TOST)
IPO Date: September 21, 2021
Number of Hedge Fund Holders: 40
Toast, Inc. (NYSE:TOST) is a Boston, Massachusetts-based provider of cloud-based restaurant management software. The company has a point-of-sales system developed on the Android platform.
Mayank Tandon at Needham increased the price target on Toast, Inc. (NYSE:TOST) from $21 to $27 and reiterated a Buy rating on the stock in a research note published on August 12. Toast, Inc. (NYSE:TOST) reported stellar ARR growth of 59% YoY as live locations grew by 42% YoY, and the Gross Payment volume jumped by 62% YoY during Q2 2022. Furthermore, Toast, Inc. (NYSE:TOST) also provided a robust outlook for Q3 2022 and improved its guidance to reflect the strong competitive position of the organization and healthy demand for modern cloud-based solutions by restaurants. The company’s strong fundamentals justify its inclusion in the list of the best technology stocks to buy now.
Here’s what Baron Funds said about Toast, Inc. (NYSE:TOST) in its Q3 2021 investor letter:
“We also participated in the IPO of Toast, Inc., a provider of technology and payment services for the restaurant industry. The company’s core offering is a point-of-sale hardware and software solution with integrated payment processing. Customers can add other features across operations including digital ordering and delivery, marketing and loyalty, team management, and back office. Toast powers 48,000 restaurant locations across 29,000 customers, most of which are small operators with under 10 locations. Toastis the clear leader in the technology market for small restaurants with the best product offering and the only end-to-end platform. Customers love the product and recommend it to their friends in the industry, driving strong inbound and referral business. Toast differentiates itself from the competition through its large field-based sales team that is deeply embedded in local communities, helping retain and upsell existing customers and onboard new customers.
We believe that as restaurants invest more in technology, Toast will be a prime beneficiary given its leading market position and best-in-class product. With an under 6% share of the 860,000 restaurant locations in the U.S. and a 3% share of a $15 billion addressable market, we believe Toast has a long runway for growth by adding customer locations and cross-selling additional products. Only 54% of Toast locations use four or more of Toast’s 10-plus products, each of which provide significant customer value and are additive to revenue. Toast stays close to its customers and continues to add innovative new features. Over time, we expect Toast will migrate up-market to increasingly serve the enterprise segment of the restaurant industry (customers with over 50 locations) and will enter new countries (22 million locations outside the U.S.), further expanding the addressable market and growth opportunity.”
As of Q2 2022, 40 funds held a stake in Toast, Inc. (NYSE:TOST).
You can also take a peek at Best Cheap Dividend Kings To Buy and 13 Largest Lithium Companies In the World.
