Yes, you can sue them (parents can be held civilly liable for their minor children's crimes). If based on evidence (e.g. the police report; data from the tracker; your and your daughter's testimony), the courts may side with you. Given the information you've provided, it's more likely than not that she stole it (i.e. you proved your case by a "preponderance of the evidence"). You can get a court judgment for the cost/value of the phone less depreciation depending on the judge.
For a lawsuit of this size, you'll probably end up in small claims court. People typically file their own paperwork and represent themselves legally. Depending on the details of the situation, the person being sued can also countersue.
Of course, lawsuits can be stressful for all involved. If this classmate is a childhood friend, it could have lifelong effects for a $600 phone. lf your children are close or connected to family friends, you may want to look at alternatives first. You could ask the parents to pay you back or come up with a way for the child in question to "work" it off through common childhood chores.
If you feel you need to file a lawsuit, sites like LegalZoom ask questions and generate documents based on your answers. So if you want to represent yourself, you still have some legal guidance.