Wednesday, August 23

Toast: Buying The Dip

Our subtle theme this week is tracking trends in experiential spending. We covered how Visa will keep winning the travel boom yesterday, so today let's check out the flipside of these ongoing shifts in the market.

While travel and experience spending is on the rise, the fastest-growing labor sector in the economy for the past year has been hospitality. It's hard to pick specific winners within that trend, but we can easily double down on the service providers who are set to win.

Chief amongst the new enablers of a much more profitable hospitality industry is our favorite IPO from 2021: Toast ($TOST). 

Toast is well on its way to beating our first price target from earlier in the year, but this market's brief shift from growth to value has presented a moment of relative weakness that we'd like to take advantage of to boost our potential upside.

Basically, there is one tiny blemish in Toast's earnings that caused a minor, unjustified selloff.  Meanwhile, Toast's growth is in line with raised expectations for 2024. 

So let's take a look at an expanding restaurant scene and why the market fled this stock in the short term. The details here will show why we're so bullish for the next year.

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