Toast will announce its fourth quarter results on Feb. 19. After the company became profitable in the two most recent quarterly reports, expectations are running high.
Analysts see earnings surging to 17 cents per share for the quarter after a loss of 7 cents per share in the year-ago period. Sales expectations of $1.3 billion indicate a 27% increase year over year.
Sales growth has been steady over the past eight quarters, ranging from 26% to 53%.
In the third quarter, the restaurant software provider announced earnings of 7 cents per share on $1.3 billion in sales. A year earlier, it lost 9 cents a share.
Annual recurring revenue rose 28% to $1.6 billion, while gross payments volume increased 24% to $41.7 billion.
For the fourth quarter, the company expects profit from subscription and technology services to grow 34% to $375 million at the midpoint.
Toast's improving bottom line has helped its EPS Rating, which stands at 81.
The stock topped a buy point of 41.50 from a cup with handle, according to IBD MarketSurge. But TOST has struggled to climb and remains near the entry. This is an early stage base, which increases the odds of a productive breakout.
The Relative Strength Rating is an impressive 94 while the Composite Rating is higher at 95. Shares are at levels last seen in Dec. 2021.
Toast provides a cloud-based platform for sales, payments, order and delivery processing as well as management and operations for restaurants. The company has also partnered with Uber for local delivery using Uber's app and Toast's online ordering system.
Shares went public on the New York Stock Exchange on Sept. 22, 2021, at 40 per share and hit an all-time high of 69.93 in November of 2021.
Toast Stock: Strong Fund Ownership
Mutual funds own 66% of shares outstanding. More funds have been net buyers of the stock over the past four quarters. Funds have also been loading up in the most recent 13 weeks, giving Toast stock an Accumulation/Distribution Rating of B+.
In the Investor's Business Daily Mutual Fund Index, the T. Rowe Price New Horizons Fund (PRNHX) and the Virtus: KAR Mid-Cap Growth Fund (PHSKX) hold Toast stock.
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