Top 10 Stocks to Buy According to 12 West Capital Management

4. 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.