Toast (TOST)

If you’re on the hunt for top stocks to buy now, Toast is a stock you can’t ignore, especially if you’re trying to win your class stock market game. This restaurant payment and software provider has had its ups and downs, but there’s a lot of potential here for savvy investors willing to take some risks. After soaring 56% during its 2021 IPO, Toast faced a reality check in 2022, struggling amid recession fears and rising interest rates that impacted growth stocks across the board. However, the recent shake-up over a controversial 99-cent processing fee turned out to be a blessing in disguise. “Now that the fee issue is behind them, investors can focus on Toast’s core growth strategies,” says analyst Mark Johnson.

The restaurant industry is resilient, and Americans are still dining out despite inflation. According to the latest data from the U.S. Census Bureau, spending at food services and drinking places is up 12.5% compared to last year, compared to just 3.1% for all retail sales. This means Toast is in a strong position to capitalize on this trend, especially as it expands its footprint. The company reported a 35% year-over-year increase in the number of locations using its services in the second quarter, setting a record for net additions. They’ve beaten analyst expectations nearly every quarter since going public, and with raised guidance for new locations, the momentum is palpable.

What makes Toast a smart buy for your stock market game is its diverse revenue streams. While concerns loom over profitability in the payments sector, Toast’s focus on the restaurant industry gives it an edge. In addition to payment processing, they offer subscription-based software services for invoicing, online order management, and payroll. This “sticky” software revenue is what investors should really be eyeing; it grew 55% year-over-year in the second quarter, with annualized recurring revenue surpassing $1 billion for the first time.

Now, let’s talk strategy. To win your class stock market game, you’ll need to adopt a high-risk, high-reward approach, and momentum trading is a great way to do that. This means you buy into stocks like Toast while they’re gaining traction, banking on the upward momentum to help you rack up points quickly. Just remember, this strategy isn’t recommended for long-term investing. For building wealth over time, diversification is key. Think about investing in an S&P 500 index fund—it spreads your money across various companies, reducing risk while building a solid foundation for your financial future.

Toast’s recent partnership with Marriott to provide services for hotel restaurants further highlights its growth potential. As it continues to grow its services and expand into new markets, now could be the perfect time to jump in. So, as you navigate your class stock market game, keep an eye on Toast. With its solid position in a thriving industry and a focus on innovation, this stock could help you score big in the competition. Don’t wait for the market to heat up; now’s the time to claim your slice of the pie!