TOST is a cloud-based platform point of sale for restaurant industry. Growth in the last few years was solid, more than 40% on average. Balance sheet is strong, with almost $1B in cash (around 10% of the market cap). Based on consensus estimates, TOST’s sales are expected to grow by more than 20% over the next few years. We think TOST is a solid business, but it is better to wait until cash flow generation is more stable.
QTRH is a small-cap company that provides communications equipment. QTRH has solid momentum recently. QTRH’s revenue growth and profitability improved meaningfully in the last few quarters. The balance sheet is okay with a net debt/EBITDA of only 0.4x. But cash flow in the last twelve months is still negative. Interesting name, cheap valuation trading at only 6.7x P/E. We consider it OK today but it has a very weak and checkered long term history so we do not 'love' it.