Down 46%, Is This Hot Growth Stock a Once-in-a-Decade Buying Opportunity Right Now?

Core Viewpoint - The article discusses the potential investment opportunity in Toast, a company that has shown significant revenue growth and is now profitable, despite its stock being down from its peak in November 2021 [1][2][10] Company Performance - Toast has added 28,000 net new restaurant locations in 2024, bringing its total customer count to 134,000, which is 135% higher than three years ago [3] - The company's sales jumped 28% in 2024 to almost $5 billion, with Wall Street consensus estimating revenue to rise to$6.1 billion this year [4] Market Opportunity - There are 875,000 restaurant locations in the U.S. and 15 million globally (excluding China), indicating a large market opportunity for Toast, which currently has a small market share [5] - The expectation is that restaurants will increasingly invest in technology to improve operational performance, providing a favorable environment for Toast's growth [5] Financial Health - Toast reported $19 million in net income last year, a significant improvement from a net loss of$246 million in 2023, indicating a positive shift towards profitability [6] - Analysts expect earnings per share (EPS) to grow faster than revenue, suggesting improved profitability moving forward [7] Competitive Advantage - Toast benefits from switching costs, which can create a durable competitive advantage as customers are less likely to switch to competitors after experiencing success with Toast's platform [7] Valuation - The current valuation of Toast's shares is at a forward price-to-earnings ratio of 38.3, with analysts estimating an EPS of $1.61 for 2027, indicating potential for future financial success [9] - While the stock appears to be a compelling buy, it is noted that it may not represent a once-in-a-decade opportunity due to ongoing competition [10]