ValueAct Capital's Q4 Portfolio Adjustments Highlight Fintech Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 14 hours ago
0mins
Should l Buy TOST?
Source: seekingalpha
- Portfolio Restructuring: ValueAct Capital significantly increased its investments in fintech during Q4, notably adding nearly 14 million shares of Rocket Companies to reach a total of 39,380,652 shares, indicating strong confidence in this sector.
- Restaurant Tech Investment: The firm also boosted its stake in restaurant technology platform Toast by 4,618,077 shares, bringing its total to 8,015,277 shares, highlighting its belief in the digital transformation potential of the food service industry.
- Emerging Investments: In Q4, ValueAct established new positions in BlackRock and Liberty Live Holdings with 695,000 shares and 1,799,319 shares respectively, demonstrating a strategic pursuit of diversification in its portfolio.
- Reduction Strategy: Conversely, ValueAct reduced its stake in Disney by 1,314,000 shares, leaving it with 3,077,931 shares, reflecting a cautious outlook on the traditional media sector's future.
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Analyst Views on TOST
Wall Street analysts forecast TOST stock price to rise
21 Analyst Rating
13 Buy
8 Hold
0 Sell
Moderate Buy
Current: 27.330
Low
36.00
Averages
47.00
High
60.00
Current: 27.330
Low
36.00
Averages
47.00
High
60.00
About TOST
Toast, Inc. is a cloud-based, all-in-one digital technology platform purpose-built for the entire restaurant community. It provides a platform of software-as-a-service (SaaS) products and financial technology solutions, including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. It serves as the restaurant operating system, connecting front of house and back of house operations across service models including dine-in, takeout, delivery, catering, and retail. Its products include point-of-sale (POS) & restaurant operations, marketing, online ordering & delivery, team management, vendor management, retail, and financial technology solutions. Its in-store POS and restaurant operations offerings are built to help reduce time to take an order, optimize operations, and handle payments. Its marketing products provide integrated solutions to deliver targeted email and SMS campaigns, build loyalty programs, offer gift cards, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Toast Reports Strong Q4 Results and Positive Outlook
- Significant Revenue Growth: Toast's Q4 total revenue increased by 22% year-over-year to $1.63 billion, with subscription revenue rising 28% to $256 million, demonstrating the company's strong performance in the restaurant management software market and further solidifying its market position.
- Customer Base Expansion: The company added approximately 8,000 new restaurants in the quarter and 30,000 for the year, totaling around 164,000, with notable traction in international markets and food and beverage retailers, indicating substantial future growth potential.
- Improved Profitability: Earnings per share soared from $0.05 a year ago to $0.16, while adjusted EBITDA jumped 47% to $163 million, reflecting the company's success in cost control and operational efficiency.
- Optimistic Outlook: Toast forecasts gross profit from subscription services and fintech to grow between 20% and 22% by 2026, with adjusted EBITDA projected between $775 million and $795 million, showcasing the company's confidence in future growth and strategic planning.
See More
ValueAct Capital's Q4 Portfolio Adjustments Highlight Fintech Focus
- Portfolio Restructuring: ValueAct Capital significantly increased its investments in fintech during Q4, notably adding nearly 14 million shares of Rocket Companies to reach a total of 39,380,652 shares, indicating strong confidence in this sector.
- Restaurant Tech Investment: The firm also boosted its stake in restaurant technology platform Toast by 4,618,077 shares, bringing its total to 8,015,277 shares, highlighting its belief in the digital transformation potential of the food service industry.
- Emerging Investments: In Q4, ValueAct established new positions in BlackRock and Liberty Live Holdings with 695,000 shares and 1,799,319 shares respectively, demonstrating a strategic pursuit of diversification in its portfolio.
- Reduction Strategy: Conversely, ValueAct reduced its stake in Disney by 1,314,000 shares, leaving it with 3,077,931 shares, reflecting a cautious outlook on the traditional media sector's future.
See More
Latest Ratings and Outlook from Wall Street
- Nvidia Rating Reaffirmed: Citi reiterates Nvidia as a buy, anticipating the stock will outperform in the second half of 2026 as demand visibility extends into 2027, recommending investors add to their positions given attractive valuations.
- Toast Upgraded to Outperform: Bernstein upgrades Toast from market perform to outperform, noting that despite a 26% year-to-date decline, the restaurant tech company is positioned as an AI winner, suggesting a positive outlook.
- Carvana Maintains Overweight Rating: JPMorgan reiterates Carvana as overweight, asserting that fears surrounding AI are overblown, with the company's vertically integrated infrastructure providing a unique competitive moat to leverage AI effectively.
- Melco Upgraded to Buy: UBS upgrades Melco from neutral to buy, highlighting that despite a 27% year-to-date decline, enhancements at its City of Dreams in Macau are expected to offset margin pressures and branding fee increases in 2026.
See More
Analysis of TOST Options Contracts and Investment Opportunities
- Put Option Appeal: The current bid for the $22.00 put option is 54 cents, and if an investor sells-to-open this contract, they commit to buying shares at $22.00, effectively lowering their cost basis to $21.46, which represents a 22% discount from the current price of $28.16, making it an attractive option for potential investors.
- Yield Potential Analysis: Should the put option expire worthless, the premium would yield a 2.45% return on cash commitment, or an annualized yield of 9.85%, referred to as YieldBoost, indicating the strategy's potential profitability in the current market environment.
- Call Option Returns: The $32.00 call option has a current bid of $1.09, and if an investor buys shares at $28.16 and sells this call, they could achieve a total return of 17.51% if the stock is called away at expiration, highlighting the attractiveness of this strategy.
- Risk Assessment: Current data suggests a 79% chance that the $22.00 put option will expire worthless, while the $32.00 call option has a 59% chance of doing the same, indicating that investors should monitor these probabilities for informed decision-making.
See More
Coinbase Reports Q4 Revenue Decline of 5%
- Revenue Decline: Coinbase reported total Q4 revenue of $1.78 billion, down 5% quarter-over-quarter, missing the Street consensus estimate of $1.85 billion, indicating potential market demand weakness that could impact future growth.
- Earnings Beat: Despite the revenue drop, Coinbase's adjusted earnings per share were 66 cents, surpassing the Street consensus estimate of 64 cents, demonstrating the company's strong performance in cost management and operational efficiency.
- Stock Price Surge: Coinbase shares jumped 13% to $159.44 on Friday, reflecting investor confidence in the company's profitability, even though overall revenue fell short of expectations.
- Market Environment Impact: The broader U.S. stock market declined, with the Dow Jones falling around 0.2% on Friday, indicating macroeconomic pressures on tech stocks that may affect Coinbase's future market performance.
See More
Pinterest Misses Q4 Revenue Expectations
- Revenue Shortfall: Pinterest reported Q4 revenue of $1.32 billion, falling short of analyst expectations of $1.33 billion, indicating competitive pressures that may undermine future investor confidence.
- Earnings Miss: The company posted adjusted earnings of 67 cents per share, below the anticipated 69 cents, reflecting challenges in profitability that could lead to shareholder scrutiny of management.
- Significant Stock Decline: Pinterest shares plummeted 19.5% to $14.95 in pre-market trading, a drastic move that may raise concerns about the company's future performance and influence investor decisions.
- Mixed Market Sentiment: U.S. stock futures showed mixed results, with Dow futures down about 0.2%, reflecting cautious market sentiment potentially linked to Pinterest's earnings report, further exacerbating investor unease.
See More
Toast Reports Strong Q4 Results and Positive Outlook
- Significant Revenue Growth: Toast's Q4 total revenue increased by 22% year-over-year to $1.63 billion, with subscription revenue rising 28% to $256 million, demonstrating the company's strong performance in the restaurant management software market and further solidifying its market position.
- Customer Base Expansion: The company added approximately 8,000 new restaurants in the quarter and 30,000 for the year, totaling around 164,000, with notable traction in international markets and food and beverage retailers, indicating substantial future growth potential.
- Improved Profitability: Earnings per share soared from $0.05 a year ago to $0.16, while adjusted EBITDA jumped 47% to $163 million, reflecting the company's success in cost control and operational efficiency.
- Optimistic Outlook: Toast forecasts gross profit from subscription services and fintech to grow between 20% and 22% by 2026, with adjusted EBITDA projected between $775 million and $795 million, showcasing the company's confidence in future growth and strategic planning.
See More
ValueAct Capital's Q4 Portfolio Adjustments Highlight Fintech Focus
- Portfolio Restructuring: ValueAct Capital significantly increased its investments in fintech during Q4, notably adding nearly 14 million shares of Rocket Companies to reach a total of 39,380,652 shares, indicating strong confidence in this sector.
- Restaurant Tech Investment: The firm also boosted its stake in restaurant technology platform Toast by 4,618,077 shares, bringing its total to 8,015,277 shares, highlighting its belief in the digital transformation potential of the food service industry.
- Emerging Investments: In Q4, ValueAct established new positions in BlackRock and Liberty Live Holdings with 695,000 shares and 1,799,319 shares respectively, demonstrating a strategic pursuit of diversification in its portfolio.
- Reduction Strategy: Conversely, ValueAct reduced its stake in Disney by 1,314,000 shares, leaving it with 3,077,931 shares, reflecting a cautious outlook on the traditional media sector's future.
See More
Latest Ratings and Outlook from Wall Street
- Nvidia Rating Reaffirmed: Citi reiterates Nvidia as a buy, anticipating the stock will outperform in the second half of 2026 as demand visibility extends into 2027, recommending investors add to their positions given attractive valuations.
- Toast Upgraded to Outperform: Bernstein upgrades Toast from market perform to outperform, noting that despite a 26% year-to-date decline, the restaurant tech company is positioned as an AI winner, suggesting a positive outlook.
- Carvana Maintains Overweight Rating: JPMorgan reiterates Carvana as overweight, asserting that fears surrounding AI are overblown, with the company's vertically integrated infrastructure providing a unique competitive moat to leverage AI effectively.
- Melco Upgraded to Buy: UBS upgrades Melco from neutral to buy, highlighting that despite a 27% year-to-date decline, enhancements at its City of Dreams in Macau are expected to offset margin pressures and branding fee increases in 2026.
See More
Analysis of TOST Options Contracts and Investment Opportunities
- Put Option Appeal: The current bid for the $22.00 put option is 54 cents, and if an investor sells-to-open this contract, they commit to buying shares at $22.00, effectively lowering their cost basis to $21.46, which represents a 22% discount from the current price of $28.16, making it an attractive option for potential investors.
- Yield Potential Analysis: Should the put option expire worthless, the premium would yield a 2.45% return on cash commitment, or an annualized yield of 9.85%, referred to as YieldBoost, indicating the strategy's potential profitability in the current market environment.
- Call Option Returns: The $32.00 call option has a current bid of $1.09, and if an investor buys shares at $28.16 and sells this call, they could achieve a total return of 17.51% if the stock is called away at expiration, highlighting the attractiveness of this strategy.
- Risk Assessment: Current data suggests a 79% chance that the $22.00 put option will expire worthless, while the $32.00 call option has a 59% chance of doing the same, indicating that investors should monitor these probabilities for informed decision-making.
See More
Coinbase Reports Q4 Revenue Decline of 5%
- Revenue Decline: Coinbase reported total Q4 revenue of $1.78 billion, down 5% quarter-over-quarter, missing the Street consensus estimate of $1.85 billion, indicating potential market demand weakness that could impact future growth.
- Earnings Beat: Despite the revenue drop, Coinbase's adjusted earnings per share were 66 cents, surpassing the Street consensus estimate of 64 cents, demonstrating the company's strong performance in cost management and operational efficiency.
- Stock Price Surge: Coinbase shares jumped 13% to $159.44 on Friday, reflecting investor confidence in the company's profitability, even though overall revenue fell short of expectations.
- Market Environment Impact: The broader U.S. stock market declined, with the Dow Jones falling around 0.2% on Friday, indicating macroeconomic pressures on tech stocks that may affect Coinbase's future market performance.
See More
Pinterest Misses Q4 Revenue Expectations
- Revenue Shortfall: Pinterest reported Q4 revenue of $1.32 billion, falling short of analyst expectations of $1.33 billion, indicating competitive pressures that may undermine future investor confidence.
- Earnings Miss: The company posted adjusted earnings of 67 cents per share, below the anticipated 69 cents, reflecting challenges in profitability that could lead to shareholder scrutiny of management.
- Significant Stock Decline: Pinterest shares plummeted 19.5% to $14.95 in pre-market trading, a drastic move that may raise concerns about the company's future performance and influence investor decisions.
- Mixed Market Sentiment: U.S. stock futures showed mixed results, with Dow futures down about 0.2%, reflecting cautious market sentiment potentially linked to Pinterest's earnings report, further exacerbating investor unease.
See More
