2 Hot Growth Stocks to Buy Before They Skyrocket

The market is officially back in bull territory according to all definitions. That’s exciting for investors because bull market conditions mean average stock values are growing. But it’s important to keep that word “average” in mind, because while a rising tide lifts all ships, some go higher than others, and there are always a few that sink.

Toast (NYSE: TOST) and Dutch Bros (NYSE: BROS) are two hot stocks that should soar as the market leans more favorably toward growth stocks. If you learn more about them, you’ll understand why.

1. Toast: Bringing restaurants into the digital age

Just when you thought there were no more industries to disrupt, Toast aims to turn running a restaurant into a modern, tech-based business. It offers comprehensive solutions, including hardware and software, with services like payment processing and online ordering. It customizes its packages to restaurant type and offers varied tiers.

Restaurants are signing up in droves, and Toast says it has an edge over its competition because its technology works exclusively for the restaurant industry, unlike competitors that serve many industries.

These kinds of solutions can make a restaurant work much more efficiently, and growth has been incredible. Annualized recurring revenue, which takes into account the subscription model and is what Toast uses as its top-line growth metric, increased 40% year over year in the 2023 third quarter. The company added 25,000 restaurants to its roster over the past year, bringing the total to 99,000, and it says that is a tiny fraction of its serviceable market.

Toast stock is down 24% over the past year despite its high growth and large opportunity. Investors seem disappointed in its profitability. However, it’s been improving. Gross profit improved 50% in the third quarter over last year, and net loss contracted from $98 million to $31 million.

In bull markets, investors tend to be more forgiving toward unprofitability. They focus more on opportunity and driving…