Josh Brown: Toast Stock Breakout and Investment Strategy

Toast Stock: A Compelling Investment Opportunity

• 💡 Toast is highlighted as a breakout stock with a $27 billion market cap, poised for potential inclusion in the S&P 500 by year-end due to consistent profitability.
• 🚀 The stock has experienced substantial accumulation, with asset managers discovering its potential, leading to a significant price increase from its earlier trading days in the 20s.

Financial Performance and Growth Metrics

• 📈 Toast has demonstrated impressive revenue growth, with a 50% CAGR over the last five years.
• 📊 Profitability is on the rise, with operating margins improving from negative 4% at the end of 2023 to 3.7% and continuing to climb with each reported quarter.

Enterprise Deals and Market Expansion

• 🤝 The company is securing large deals with enterprise-level clients such as Marriott and Applebees, indicating a significant expansion beyond smaller diner operations.
• 🎯 These substantial deals suggest that the Total Addressable Market (TAM) for Toast's services may be considerably larger than currently estimated by analysts.

Investment Outlook

• ✅ Josh Brown remains long on Toast, choosing not to take profits despite the stock's recent upward movement, signaling strong conviction in its future performance.
• ⚠️ While the stock has technically broken out this week, the advice is to not chase and to remain calm in investment decisions.