If You Invested $10,000 in Lightspeed Commerce Stock in January 2023, This Is How Much You Would Have Today

High volatility in Lightspeed stock isn’t unprecedented. This to Canadian tech stock minted new millionaires after similar drawdowns.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The extreme volatility that retail commerce software and payments platform vendor Lightspeed Commerce (TSX:LSPD) stock has witnessed since its initial public offering (IPO) makes extrapolations of potential investment returns highly subjective.  

If you invested $10,000 in Lightspeed stock at its IPO in 2018, you would have about $13,100 in your account today. Investors who invested the same amount near the tech stock’s peak, which happened just before a catastrophic short-seller attack in September 2021, could have experienced significant capital losses. They could have lost as much as 89% of capital at worst or retained a $1,700 account balance today.

Created with Highcharts 11.4.3Lightspeed Commerce PriceZoom1M3M6MYTD1Y5Y10YALL8 Mar 201916 Mar 2025Zoom ▾202020212022202320242025202020202022202220242024www.fool.ca

That said, investors who bought $10,000 worth of LSPD stock in January 2023, betting on its strong recovery potential, could have grown their capital to nearly $13,000 today.

Bearish investors may view the recent recovery in Lightspeed stock price as akin to a dead-cat bounce — a temporary recovery on an asset doomed to fail completely. However, signs are emerging that the tech stock has turned a corner.

Investors bullish on the company’s sustained valuation recovery may find inspiration from a widely successful Canadian tech stock that has minted millionaires.

One inspiring recovery story is CGI, another Canadian domestic stock, which experienced similar drawdowns to Lightspeed stock when the dot.com bubble burst between 2000 and 2003. Investors who bought CGI stock at its IPO and held onto their CGI stock through the trough (an 80% loss) could be sitting on a $3.5 million position today or a staggering 34,500% holding period return.

Significant drawdowns may happen on top growth stocks, too. CGI stock has successfully recovered past all-time highs over the past 20 years to mint new millionaires.

Could Lightspeed stock make new millionaires, too?

Long-term-oriented investors could feel more comfortable holding Lightspeed stock now than ever before. Truth be told, the business isn’t as sustainably profitable or generating positive cash flows as that of CGI to sustain a new round of accretive acquisitions yet. While it’s still too early to expect a millionaire-maker status, the company has the potential to make a strong comeback, given its new operating trajectory,

Lightspeed is currently engineering a strong recovery. Corporate restructuring efforts, which began with a halt to its aggressive acquisitions-led growth strategy and included management changes, are beginning to bear fruits. Recent cost cuts and market repositioning attempts have created a new sustainable growth path that could lift Lightspeed stock in the future.

Lightspeed’s turnaround in 2023 can be summarized in a graphic below.

Lightspeed Commerce Revenue and Operating earnings 2018-2023

The company sustained double-digit revenue growth rates through the first nine months of 2023 without any costly acquisitions. Cost cuts are working, and for the first time since its IPO, the company’s operating costs have narrowed during the past 12 months.

An operating breakeven at the adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) level in 2024 should help the company generate positive free cash flow — a critical ingredient for sustainable growth.

Meanwhile, Lightspeed’s balance sheet remains intact with a $1 billion cash treasure trove that’s powering merchant lending efforts and generating significant interest income to augment corporate investment budgets.

Stock may outperform in 2024

Valued at a price-to-sales (P/S) multiple of 3.5, or nearly half its industry’s P/S multiple of 6.5, Lightspeed stock could fetch better value in 2024 should it maintain double-digit revenue growth rates and consistently report positive quarterly adjusted EBITDA results throughout this new year.

To be rational, the road to minting new millionaires may still be long and winding. Given time and consistency, Lightspeed stock could potentially sustain a positive share price growth over the next five years as the business matures profitably.

Should you invest $1,000 in CGI Group right now?

Before you buy stock in CGI Group, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and CGI Group wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

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 Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends CGI and Lightspeed Commerce. The Motley Fool has a disclosure policy.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Tech Stocks

artificial intelligence AI data deep processing
Tech Stocks

TFSA Buy Alert: This AI Stock Could Turn $7,000 Into $22,000 by 2030

Canadian investors should consider holding undervalued tech stocks such as AMD in the TFSA to generate outsized gains.

Read more »

Group of people network together with connected devices
Tech Stocks

If I Could Buy and Hold Only a Single Stock, This Would Be it

If there's one industry that's already proven itself, it's this one. And this tech stock is proving again and again…

Read more »

Person uses a tablet in a blurred warehouse as background
Tech Stocks

How to Invest in Canadian AI Stocks for Long-Term Gains

Artificial Intelligence stocks are the new goldmine, but approaching them in the right way is the key to capturing long-term…

Read more »

A chip in a circuit board says "AI"
Tech Stocks

The Best AI Stock to Invest $1,000 in Right Now

Let's dive into why Docebo (TSX:DCBO) could be one Canadian AI stock investors are overlooking in this current environment.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution for Long-Term Gains

Whether it's infrastructure, real estate or tech, these three stocks offer a promising addition to your TFSA.

Read more »

up arrow on wooden blocks
Tech Stocks

3 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

If you have a long-term horizon to invest, consider investigating these three growth stocks.

Read more »

Circuit board with glowing lines
Tech Stocks

3 Tech Stocks I’m Looking to Buy in March

Tech stocks certainly can offer growth, as well as risk. Yet these three tech stocks offer more of the former,…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Tech Stocks

CRA: Here’s the TFSA Contribution Limit for 2025

Here's why TFSA investors can own TSX tech stocks such as Descartes and Enghouse in their portfolios right now.

Read more »