Group 1 - Toast's stock has increased over 60% year-to-date, and a recent price increase in credit card processing fees could further enhance growth into 2025 [1][5] - The company raised its credit card processing fee to 0.23%, marking the first increase in 12 years [2] - Previous attempts to increase prices faced backlash, leading to a reversal and the resignation of the CEO, but the current increase allows restaurant owners to decide on passing costs to customers [3][4] Group 2 - The fee increase, while small, could generate significant revenue given Toast's projected processing of nearly 160billioningrosspaymentvolumethisyear[5]−Toastplanstoimplementaseriesofsmall,steadypricechangesaspartofitsstrategytogaugecustomerreactions[6]−Thecompanyisexpandingitspresenceintherestaurantsector,currentlyservingabout120,000locationsoutof750,000intheU.S.,andhasalsoenteredinternationalmarkets[7]Group3−Toastisdiversifyingintoadjacentmarketssuchascoffeeshopsandretailfoodandbeverage,enhancingitsserviceofferings[8]−Therestaurantindustryisexperiencinggrowth,withsalesup3.71.47 billion, indicating strong growth potential [11] Group 4 - Investors are encouraged to focus on ARR rather than price-to-sales ratios due to the low gross margin of fintech revenue [10] - The combination of price increases, geographic expansion, and growing restaurant spending positions Toast for continued strong growth [11] - Future monitoring of the impact of credit card processing fee changes on Toast's business is advised, as further price increases are anticipated [12]
Toast(TOST) The Motley Fool·2024-10-29 09:15