Toast is Thursday's selection for IBD 50 Stocks To Watch as shares now sit in a buy zone. Toast stock has broken out from an early-stage consolidation pattern with an entry point of 27.88.
The digital payments company offers a platform for billing, orders and delivery for restaurants. Sales growth has been steady over the past eight quarters.
The company showed profitability in the second quarter ended June 30 with earnings of 3 cents per share, after several periods of losses. Sales grew 27% to $1.2 billion.
Analysts polled by FactSet are bullish on profits for the year. In 2024, they see profits rising 206% with earnings of 49 cents per share. In 2025, earnings estimates of 72 cents per share ring up to another 48% increase in profits.
Funds Load Up On Toast Stock
Toast stock's Relative Strength Rating of 92 is its biggest strength. It shows the stock has been doing better than the vast majority of stocks in the Investors' Business Daily database. The Composite Rating of 77 and EPS Rating of 54 lag, however.
That is not stopping funds from loading up on the stock. Mutual funds own 58% of outstanding shares. More funds have been net buyers since the beginning of the year.
The stock gained 59% during that time, going by Wednesday's closing price. Funds have also been adding the stock in recent weeks. That has given the stock an Accumulation/Distribution Rating of B.
The T. Rowe Price New Horizons Fund(PRNHX) and the Virtus KAR Mid Cap Growth Fund(PHSKX) are among those holding shares of Toast stock.
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