Thanks to the legalization of marijuana, the companies related to it saw a boom in their stock prices. But the relatively volatile green market is slowly being overshadowed by the underdog sector in this country’s stock market: information technology. Here’s why this is a great time for you to consider buying in the tech sector.
On the S&P/TSX index, IT makes up only 5.2% of the country’s stock market, pushing it to sixth place. This number is in stark contrast to the U.S., where IT is the leading sector with 19.9% of the market index. Many investors who wanted to invest in the fast-growing IT sector have had to look across the border.
This trend is changing now, with companies like Lightspeed (TSX:LSPD) joining the market. Lightspeed had a groundbreaking IPO in March, bringing in more than $240 million, which is $40 million more than the company’s projections.
2019 for Lightspeed
If you look at the company’s stock prices for the year since its IPO, Lightspeed showed steady growth from March to June, a period of rapid growth to August, and then a period of decline. However, the stock value was about $19 at the start of March and is currently $33.30.
If you had bought $10,000 of shares around the time of the IPO, you would have increased your investment to $16,905 today. If you take a look at the peak in August, that same investment was worth $25,719, nearly 2.5 times the original amount. And this is just in the first year of the company going public.
Lightspeed has seen a year-to-year revenue growth of 37.7%, which is projected to increase to 48% in the next year.
Future growth
Lightspeed is a point of sale (POS) company, providing small entrepreneurs and startups with relevant technical assistance to grow their businesses. As an only 14-year-old company that has recently gone public, Lightspeed has seen astonishing growth. It operates in about 100 countries and is handling cash flow of more than $13 billion.
Lightspeed is usually compared to e-commerce behemoth Shopify, which makes Lightspeed’s growth seem trivial in comparison. A better way to look at that comparison is to imagine what Lightspeed could be in the future.
As a company focused on small retail businesses and restaurants, Lightspeed doubled its stock value in a year. You can imagine where these numbers could go once it starts attracting larger enterprises. The POS industry is already projected to become a $124-billion industry by 2024. And Lightspeed is easily considered one of the top ten POS companies.
Conclusion
Buying Lightspeed stock at the right time might have made you a millionaire already, with shares reaching up to 2.5 times its buying value. But it’s not too late. The company is growing steadily, unlike many tech startups that see sharp inclines and steep declines in market value.
The company’s growth might look flashy, but it’s still considered significant and relatively reliable. If you are thinking about buying stock in the technology sector, you may want to take a closer look at Lightspeed.
