Surviving the pandemic, the IPO Class of 2021 has attracted strong demand from Wall Street since their initial public offerings. Classmates include Duolingo, Samsara, Dutch Bros, P10 and AppLovin, one of the best stocks of 2024. Another is Toast stock.
Few industries were harder hit during Covid than restaurants. And while Toast — a provider of technology solutions for restaurants — initially sank after going public, it learned to stand the heat and now stands poised to launch a fresh breakout. It also has joined AppLovin and its other IPO classmates on the IBD Breakout Stocks Index.
Toast, Samsara Lead 2021 IPOs On IBD 50
In addition to landing on the IBD Breakout Stocks Index, Toast and Internet of Things leader Samsara have secured placement on the IBD 50 list of top growth stocks. Language-learning platform Duolingo and coffee shop chain Dutch Bros also make this screen.
On Monday, AppLovin was featured as a member of IBD Leaderboard, a list of stocks to watch curated by IBD market experts.
See Who Joins Toast, AppLovin On The IBD Breakout Stocks Index
Resurgent Growth
Toast provides a cloud-based platform developed specifically for the restaurant industry. Toast's technology gives restaurants everything they need to run their business across point of sale, payments, operations, digital ordering and delivery, marketing and loyalty, and team management.
With a 94 Composite Rating, Toast outpaces 94% of all stocks in terms of the most important stock-picking factors. Fellow leaders in Investor's Business Daily's Credit Card/Payment Processing group include Shift4 Payments and Paymentus, with both earning the highest-possible 99 Composite Rating. The group ranks No. 32 out of the 197 industries IBD tracks.
Albeit based on comparisons to prior-year quarters that showed a loss, Toast has delivered two consecutive quarters of triple-digit earnings growth. Analysts expect that to continue when the Boston-based company reports fourth-quarter results on Feb. 19. Still based on prior-year quarters that showed a loss, analysts forecast 250% earnings growth to 17 cents per share, followed by a 467% gain to 17 cents a share for the first quarter of 2025.
Sales growth has been solid and steady. Although gains have slowed somewhat, revenue growth has ranged from 26% to 53% over the last eight quarters. In the third quarter, Toast generated slightly more than $1.3 billion in sales.
Five Reasons To Watch Samsara. A Pending Breakout Is Just One.
Toast Stock Warms Up Breakout
Since bottoming out in November 2023, shares of Toast began a post-pandemic climb, generally holding or quickly regaining support at the 10-week moving average.
The stock gapped up in heavy volume after reporting third-quarter earnings on Nov. 7 before pulling back to begin forming its current base late that same month.
Toast is now working on a second-stage cup with handle. The buy point is 41.50. On Jan. 31, the restaurant technology firm initially cleared that entry, but has since floated in and out of buy range.
On Tuesday, Toast pulled back as its relative strength line dipped. While down slightly again on Wednesday, the stock came off the day's lows and bounced off its 21-day exponential moving average. Also note how the 21-day line recently climbed back above the longer term 50-day line, as sign of rising technical strength.
Meanwhile, fellow Class of 2021 IPOs Samsara and Duolingo remain in or near buy range. Dutch Bros has climbed beyond buy range. On Wednesday, the stock found support at and bounced off its 21-day line.
On the downside, P10 fell sharply below its 50-day line on earnings Wednesday, but managed to somewhat mitigate its losses.
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