ValueAct Capital Management more than doubled its investment stake in restaurant software provider Toast (NYSE: TOST). The activist hedge fund targets high-quality businesses it considers mispriced due to unfavorable industry conditions.
Toast added 30,000 net new restaurant locations in 2025. The company now operates in approximately 164,000 total locations. Management identifies a growth runway of over 700,000 potential restaurant sites in the U.S.
The stock trades at just over 6 times its enterprise value-to-annualized recurring revenue (ARR) multiple. This valuation is based on 2026 guidance of $2.3 billion in ARR.