You can teach old industries some new tricks, and some markets are just ripe for disruption. As an investor, it can pay to watch sectors that haven't changed much in ages. Sooner or later, someone will come up with a better way to tackle a pressure point.
Toast (TOST +1.53%), Roku (ROKU +3.79%), and Bumble (BMBL +1.86%) are three companies that tried to breathe new life into established markets that were growing stale. They are disruptors. They are all trading well below their all-time highs, but that only makes this an opportunistic time to consider riding shotgun as they gain market share and ideally upticks.
NYSE: TOST
Key Data Points
Toast
You probably don't have to try too hard to think of the last time that you settled up your restaurant bill by interacting with a Toast point-of-sale reader. There are 99,000 eatery locations on the high-tech platform, a 34% increase over the past year. The number of dining establishments out there hasn't grown that quickly over the past year. Toast is gaining market share, and that's not changing anytime soon.
Toast gives independent restaurants tech tools to compete against larger players, and I'm not just talking about the $33.7 billion in gross payment volume that it processed in its latest quarter. Toast offers an entire suite of tools to manage everything from payroll to inventory control to third-party delivery app orders. With one next-gen solution that can cover most of the necessary tech tasks, it's easy to see why Toast is growing quickly. Its customers are loyal, and that reminds me: Did I mention that the platform can also help an eatery run a customer loyalty program?
Image source: Getty Images.
Investors have an opportunity here to sink their teeth into Toast. The stock tumbled after the company posted its latest financials earlier this month. Year-over-year growth in payment volume per location was essentially flat, and Toast warns that it may dip in the current telltale holiday quarter. It's a sobering sign for consumer spending trends, but this doesn't detract from the long-term growth story for Toast. Revenue growth should still top 30% for the fourth quarter.
Toast stock has shed nearly half of its value since its summertime high. The shares have plummeted 80% since their all-time peak shortly after going public in late 2021. If you think any lull in restaurant dining and takeout is temporary this could be a good time to warm up to Toast after hitting a 52-week low last week.
NASDAQ: ROKU
Key Data Points
Roku
You may not see Roku as a disruptor, especially since it directly competes with some of the most valuable tech and e-commerce companies on the planet. However, Roku did invent the streaming video device. Its founder CEO Anthony Wood also created the digital video recorder (DVR) in another lifetime.
Planting the flag first doesn't guarantee victory, a lesson Wood learned all too well when TiVo walked away with the DVR glory that he championed at Replay TV. He's making sure he doesn't come in second this time around. Roku has double the market share of its closest competitor when it comes to getting its operating system in smart TVs through either aftermarket devices that plug into your TV or shipping from the factory with the platform already installed.
There are 75.8 million active accounts on Roku, a 16% increase over the past year. The 26.7 billion hours streamed on the platform in its latest quarter is a 22% gain. Roku's 20% top-line growth is its third straight quarter of accelerating revenue gains. The stock hit an all-time high this week, topping $100 for the first time since the springtime of last year. The lack of profitability remains a problem, but with the stock still 79% below its all-time 2021 high it's must-see TV for investors right now looking to buy the basket instead of the streaming service stock eggs.
NASDAQ: BMBL
Key Data Points
Bumble
Bumble didn't invent online dating, but founder Whitney Wolfe Herd has caught matchmaking lightning in a bottle twice. She was part of the founding group of what is now Match Group's Tinder, currently the world's top online dating app. Then she left to launch Bumble, raising the bar by creating a platform where only female-identifying users can make the first contact with a prospective match.
Wolfe Herd announced that she would be stepping down as CEO earlier this month, but Bumble continues to gain market share. The company is expected to grow its revenue 17% this year, triple the rate of Match Group. Despite its heady growth, Bumble has shed nearly half of its value from its February highs. Leaning on tech tools to broaden the pool of potential romantic partners isn't going away anytime soon. Bumble is waiting for you to initiate contact.
