3 reasons to buy toastakts as if there was no tomorrow

After a banner year in 2024 the S&P 500 Starts to achieve a steady climb in 2025. This year it rose by 3% and some of its largest components such as Apple And AmazonHave already brought the fourth quarter. But Nvidia And Microsoft If the yields are to publish on February 26 and 28, and their results could have a great impact on how the market takes its next steps.

Long -term investors know that it is important to stay up to date, but it is even more important to concentrate on what the market will look like five, 10 and 20 years later. No matter what is going on today and how different the landscape could look in a few years, the market will probably reward patient investors.

toast (Tost -4.49%))) is a relatively small and niche company that wins admirers. The stock rose by 83% last year, and the long -term chance looks convincing. Here are three reasons to buy it today.

1. It has a massive market chance

Toast is an artificial company with a cloud-based company. In other words, his model is now the last cry. It uses the restaurant industry with hardware and software solutions that run the restaurants much easier and grows quickly.

There are various ways to achieve growth, and everyone contributes to an exponentially increasing opportunities. On the one hand, customers with a high price of the platform compete. Toast added 7,000 new locations for a total of 127,000 in the third quarter of 2024. It benefits from a flywheel effect in which its platform for restaurants becomes the standard. It has a robust transfer network, and 20% of the new locations come from transfers, which complements the flywheel effect.

Its platform is constantly updated with new functions and tools that improve the user experience. For example, it has introduced restore skills that aim for categories such as the lines of restaurants and bakeries.

Toast sees a chance of more than $ 1 trillion in US restaurants, where it estimates that it contains about 13% of the market from locations. This can be grasped much more, but it is pending with competitions of similar companies – those that aim at the restaurant industry, such as Aloha, and those that aim at the wider small businesses, such as blockThe business of the Square seller.

Toast also branches in international regions, where there are 2,000 locations and gives a chance of 280,000 at short notice. Over a longer period of time, the full chances would be 15 million locations worldwide, so that there is a lot of space to grow over many years.

After all, it recently launched a new product for the food area, where it is aiming for 220,000 locations. It already has 1,000 lives and this business is just starting.

2. It will be profitable

Management shows the top line progress with an annualized recurring run rate (ARR), which rose by 27% in the third quarter compared to the previous year. Since toast has a subscription model, it has reliable, recurring monthly sales and generates customer loyalty. Although the ARR has slowed down in the last quarters in the last quarters, Toast becomes profitable with increasing quarter.

Image source: toast.

The net profit was $ 56 million in the third quarter of 2024, compared to a loss of $ 31 million in the previous year. Management leads the increase in gross profit and the adjusted profit before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter and throughout the year and increased guidelines both after the third quarter. Wall Street expects a profit of $ 0.17 per share (EPS) per share in the fourth quarter.

3. The price is right

Despite the strong stock profits, healthy growth and profits, the toastactivies are still dealing with a reasonable evaluation of 33 times forward gains and less than five times with the 12-month turnover.

Between its many options and the fresh and growing profits, I expect toast to expand its business and reward investors for years. It is a good time for sale at this price.