Tim Beyers, an investment analyst at The Motley Fool with a focus on restaurant tech, and Kirsten Guerra, a gamer expert specializing in Roblox, join the discussion. They dive into Toast's impressive year-over-year growth and its innovative point-of-sale systems boosting restaurant revenue. Tim explains why Toast's stock is undervalued, while Kirsten addresses Roblox's position against competitors and user safety concerns. Additionally, they explore Microsoft's advances in quantum computing and its implications for the tech industry.
Toast's integrated system significantly streamlines restaurant operations, resulting in improved efficiency and increased profitability for multi-location owners.
Microsoft's breakthrough in quantum computing with topological superconductors could lead to more stable quantum operations, though practical applications are still uncertain.
Deep dives
Toast's Role in Restaurant Efficiency
Toast addresses significant operational challenges faced by restaurateurs managing multiple locations. It provides an integrated system that helps streamline processes such as inventory management, staff coordination, and menu adjustments, which are critical in the fast-paced restaurant environment. By outsourcing these complexities to Toast, restaurant owners can focus on delivering quality food while achieving greater efficiency, ultimately resulting in faster table turnover and increased profitability. Testimonials from users indicate that Toast can enhance revenue, exemplified by restaurant operators noting a substantial increase in average check sizes and overall earnings.
Financial Performance of Toast
Toast reported notable year-over-year growth, including a 29% increase in overall revenue and a significant rise in subscription revenue at nearly 41%. The company also achieved its first gap profit ever, generating $19 million in net income while expanding its reach to an additional 28,000 restaurant locations. The metrics reveal a healthy business model, maintaining a core profitability margin that aligns well with past projections. However, the market reacted negatively to a disappointing earnings per share figure, indicating that while Toast's fundamentals seem strong, short-term investor sentiment may hinge on earnings expectations.
Advancements in Quantum Computing
Researchers at Microsoft announced a groundbreaking development in quantum computing, leveraging a new state of matter called a topological superconductor. This technology aims to enhance predictability in quantum systems, which traditionally face challenges due to the hyperactive behavior of particles at near absolute zero temperatures. By creating boundaries for particles through a concept known as the Majorana bound state, the system could potentially offer more stable conditions for quantum operations. While this advancement is promising, the commercial viability remains uncertain as extensive research and refinement are still required before practical applications can be realized.
… and why the stock is “nowhere near fully valued.”
(00:21) Tim Beyers and Mary Long break down earnings from Toast, the restaurant tech company, and discuss Microsoft’s latest development in quantum computing.
Then, (18:00), Kirsten Guerra joins Mary to check in on Roblox, how it stacks up against other gaming companies, and why the platform’s young user base concerns some investors.