We recently published a list of Top 10 Stocks to Buy According to 12 West Capital Management. In this article, we are going to take a look at where Toast, Inc. (NYSE:TOST) stands against other top stocks to buy according to 12 West Capital Management.
Joel Ramin founded 12 West Capital Management in August 2011, establishing it as a New York-based hedge fund specializing in global investments across equities, equity-related instruments, and credit securities. Prior to launching 12 West, Ramin worked as an analyst at Bridger Capital, gaining experience in both long equity positions and short-selling strategies. Currently, he serves as the firm’s Managing Member and Portfolio Manager, overseeing investment decisions and advisory services for institutional investors in the United States.
12 West Capital Management focuses on providing tailored investment management solutions, leveraging a research-driven approach to identify opportunities across various markets. The firm actively engages in both long-term and short-term investments, aiming to maximize returns through strategic asset allocation and risk management. Its expertise spans multiple asset classes, allowing it to adapt to changing market conditions while delivering value to its clients.
Joel Ramin holds a degree from the McIntire School of Commerce, where he completed his undergraduate studies in finance in 2000. His background in finance and investment, combined with his experience at Bridger Capital, has shaped his approach to portfolio management at 12 West Capital. Under his leadership, the firm has built a reputation for its disciplined investment strategies and commitment to generating long-term growth for its investors.
According to its most recent 13F filing for the fourth quarter of 2024, 12 West Capital Management reported nearly $954.6 million in managed 13F securities, with its top 10 holdings accounting for a hefty 90.75% of its portfolio.
Our Methodology
The stocks discussed below were picked from 12 West Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial shot of a computer server station, highlighting the company’s focus on cloud-based technology.
Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders as of Q4: 63
12 West Capital Management’s Equity Stake: $112.08 Million
Toast, Inc. (NYSE:TOST) is a Boston-based provider of cloud-based restaurant management solutions, specializing in an integrated point-of-sale (POS) system designed for the food service industry. Built on the Android platform, the company offers a range of hardware and software solutions, including the Flex terminal, Tap payment processor, Toast Hub, and receipt printer. Since launching in March 2020, Toast, Inc. (NYSE:TOST) has rapidly expanded, delivering digital tools that help streamline restaurant operations and improve overall efficiency.
For the fourth quarter of 2024, Toast reported record-breaking financial results, marking significant growth across key metrics. As of December 31, 2024, annual recurring revenue (ARR) increased by 34% year-over-year, reaching $1.6 billion. The number of restaurant locations using its platform expanded by 26% to approximately 134,000, while gross payment volume (GPV) grew 25% to $42.2 billion. Toast, Inc. (NYSE:TOST) also reported a notable turnaround in profitability, with GAAP income from operations reaching $32 million, a sharp contrast to the $56 million loss reported in the prior year. GAAP net income improved to $33 million, compared to a net loss of $36 million in the fourth quarter of 2023. Adjusted EBITDA surged to $111 million, nearly four times higher than the $29 million reported in the previous year’s quarter, reflecting strong operational efficiency.
For the full year 2024, Toast, Inc. (NYSE:TOST) maintained its growth momentum, with GPV rising by 26% to $159.1 billion. Subscription services and financial technology gross profit climbed 34% to $1.4 billion, while adjusted EBITDA rose significantly to $373 million from $61 million in 2023. Net cash from operating activities more than doubled to $360 million, while free cash flow increased to $306 million.
Looking ahead, Toast, Inc. (NYSE:TOST) expects continued strong performance in the first quarter of 2025, with non-GAAP gross profit projected to range between $385 million and $395 million, and adjusted EBITDA anticipated to be between $100 million and $110 million. With a growing customer base and continued financial strength, the company is well-positioned for long-term success in the restaurant technology sector and, therefore, is a top stock to buy according to 12 West Capital Management.
Overall, TOST ranks 4th on our list of top stocks to buy according to 12 West Capital Management. While we acknowledge the potential for TOST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TOST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
