What happened?
Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock jumped by about 8.9% last week to settle an extremely volatile week in the green territory. With this, LSPD stock ended its five-week-long losing streak. Year to date, its stock is still trading with more than 21% losses compared to a minor 0.2% rise in the TSX Composite Index.
So what?
Most tech stocks started last week’s trading on a solid note. The U.S. Federal reserve’s latest move to keep key interest rates unchanged in January came as a relief for investors who were hoping for an aggressive monetary policy tightening to fight inflation. This policy move led to a rally in tech stocks on Monday last week, and Lightspeed stock inched up by nearly 19% in the first couple of days of the week.
However, tech stocks turned negative again on Wednesday after the release of a much worse-than-expected U.S. non-farm employment report. That’s why LSPD stock trimmed its weekly gains later during the week, losing 11% of its value on Wednesday and Thursday combined.
Amid this heightened volatility, Lightspeed also announced its third quarter of the fiscal year 2022 (ended in December 2021) results last week. Its latest quarterly results managed to beat Street analysts’ expectations. The Canadian commerce platform provider’s total revenue rose by 165% from a year ago to US$152.7 million — 6% better than analysts’ estimates. Similarly, the company reported an adjusted net loss of US$0.07 per share, which was better than the expectations of a US$0.09-per-share loss.
Its better-than-expected financial results seemingly helped LSPD stock pull back later during the week, as the pressure from the tech sector-wide selloff gradually subsided. That’s why the stock ended the week with nearly 9% gains.
Last week, Lightspeed also tried to regain investors’ confidence by making some big changes in its top leadership as its president JP Chauvet replaced Dax Dasilva as the new CEO.
Now what?
Despite its handsome recovery last week, we must remember that Lightspeed stock has consistently been trading on a bearish note for the last five months. This bearish trend started in September last year when a New York-based short-seller made several serious allegations against Lightspeed and its management. While most Street analysts remained positive on LSPD stock, even after the release of this short report, it certainly hurt investors’ sentiments, fueling a big selloff in the stock.
Nonetheless, investors might not ignore the fact for long that Lightspeed continues to beat Street’s expectations with solid sales growth. Its consistent growth could help LSPD stock recover in the medium term, I believe.
