Lightspeed (TSX:LSPD) Stock: The Best Is Yet to Come

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock has risen impressively since its IPO, and it may rise further still!

| More on:

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock has been on an incredible run these past few years. Driven by a string of impressive earnings releases, it has risen 733% post-IPO. If you’d invested $10,000 in LSPD at market close on its IPO date, your position would be worth $83,300 today.

And the incredible part is, the best is yet to come. Lightspeed is currently going through one of its biggest growth spurts ever. Acquiring competitors and growing revenue like wildfire, it is expanding at a rapid pace. Ever since the COVID-19 pandemic hit, LSPD has been getting stronger and stronger. In this article, I’ll explain why that could continue to be the case.

LSPD making acquisitions

One of the biggest reasons why LSPD’s rapid growth could continue is because the company is making valuable acquisitions. Over the past 12 months, the company has acquired at least three smaller firms:

  • Vend: A cloud-based retail management company (for $204 million in cash)
  • Upserve: A restaurant cloud software company
  • ShopKeep: A cloud service platform provider

These are all up and coming businesses that share synergies with Lightspeed. Vend increases LSPD’s retail presence; Upserve gives it access to more restaurant customers; and ShopKeep gives it an increased edge in cloud services. So, Lightspeed is increasing its customer base and industry presence with these acquisitions, which is crucial in an industry as historically fragmented as POS software.

Impressive revenue growth

Another big thing Lightspeed has going for it right now is strong revenue growth. In its most recent quarter, the company grew its sales at 220% year over year — the highest growth rate on record. Throughout 2020, the growth rates were very high as well. This is one company where growth is not only strong but actually accelerating (i.e., getting stronger). So, its stock could easily be worth more tomorrow than it is today.

Similar stocks rising high

A final factor that provides a basis for optimism toward Lightspeed stock is the fact that similar stocks are rising high in the markets. In the past few years, we have seen a number of payments companies rise dramatically in a short period of time:

  • Paypal Holdings: Up 719% since 2015
  • Square: Up 2,900% since its 2015 IPO
  • Shopify: Up 5,300% since its IPO

Those are pretty impressive results to put it mildly.

And they aren’t the only payments companies that are making waves. The Irish payments giant Stripe is set to go public this year. It’s rumoured to be doing about $1 billion a year in revenue, and its IPO is one of the most hotly anticipated of the year.

Do all of the gains posted by Lightspeed’s competitors mean that Lightspeed itself will perform similarly?

No. Stocks are correlated, but the correlation is not one — there is room for variance. Additionally, all of the stocks named above have been trading for much longer than LSPD. If a tech stock selloff hits soon, then LSPD may underperform for a while. For now, though, it looks like it’s in good company.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Lightspeed POS Inc., PayPal Holdings, Shopify, and Square. The Motley Fool recommends the following options: long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, and short January 2023 $1,160 calls on Shopify.

More on Tech Stocks

BCE stock
Tech Stocks

10% Yield: Is BCE Stock a Good Buy?

The yield is bigger than it's ever been in the company's history. That might not be a good thing.

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

So You Own Shopify Stock: Is it Still a Good Investment?

Shopify (TSX:SHOP) stock has had a run, but there's still room to the upside.

Read more »

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

nvidia headquarters with nvidia sign in front
Tech Stocks

Nvidia Just Delivered a Beat-and-Raise Quarter. There’s 1 Red Flag Investors Shouldn’t Ignore.

The chipmaker continued to benefit from robust demand for artificial intelligence (AI). But can it last?

Read more »

GettyImages-1473086836
Tech Stocks

Why Super Micro Computer Stock Is Soaring Today

The volatile stock is getting a boost from Nvidia.

Read more »

Snowflake logo in snowflake office on wall_snowflake-1
Tech Stocks

Here’s Why Snowflake Stock Skyrocketed Today

Shares of the data company are up 32% for the day.

Read more »

man touching magnifying glass button on floating search bar internet google search engine
Tech Stocks

Why Alphabet Stock Was Sliding Today

The parent company of Google is facing heat from U.S. regulators.

Read more »