Could Lightspeed (TSX:LPSD) Stock Increase by 100% in 2020?

Let’s take a look at Canada’s blue-eyed tech stock Lightspeed POS and see whether the stock has the potential to double in value in the coming year.

| More on:
Business success with growing, rising charts and businessman in background

Image source: Getty Images

From the time it started trading on the Toronto Stock Exchange, Lightspeed POS (TSX:LSPD) has witnessed an explosive growth. The stock had gained 157.2% in the space of just three months of its IPO, almost mirroring the growth of Shopify itself. Since then, Lightspeed has dipped in price, trading for $33.66 per share.

Shopify is a darling stock that has grown so much that investors who want to leverage its growing value will stay away from its high valuation. Lightspeed, however, is relatively quite cheap and presents itself as a promising prospect in tech stocks.

The company is an e-commerce enabler that is helping retailers bring up their game and allow them to compete with e-commerce stores that have been affecting their business.

At the speed of light

While I wouldn’t say Lightspeed is growing at the speed of light, the company can offer you phenomenal returns. In the past few months, Lightspeed has hit the ground running in the e-commerce industry. The company has carved out a niche for itself with its play in big data and digital payment solutions.

At this time, the segment in the e-commerce industry that Lightspeed operates in is up for grabs. Being one of the first entrants will allow it to skyrocket, as the industry matures in the coming months. LSPD has a gross profit margin of $53.88 million at writing, and it is continuously looking to grow.

Lightspeed is expanding its potential to earn in its early stages, as it acquires more names. The most recent acquisition for Lightspeed POS is Kounta, a cloud-based POS firm that operates in the Asia-Pacific region.

A company on the dip

Lightspeed stocks are trading for almost 31% below the 52-week high of $47.70 at the time of writing. Despite losing a significant chunk of its value, Lightspeed can have a high demand from businesses all over the world. Right now, it seems that Lightspeed is focused more on growth, and that can affect its profitability for the short term. The acquisitions mean that there is potential for the company to grow massively as the industry picks up pace.

Instead of handling few but major clients, Lightspeed is currently focusing on catering to medium and small businesses. Its unique business model makes the company relatively safe due to high potential demand.

Foolish takeaway

While I cannot guarantee that Lightspeed will explode just as much as Shopify did back when it started, I am expecting Lightspeed to grow significantly in 2020. The company has everything going in its favour right now. The industry is ripe for the taking, while Lightspeed has no real competition and the company is trading for a low value of $33.66 per share.

Already up by 11.1% since November 22, 2019, I think buying Lightspeed stocks right now could be ideal before it becomes untouchable in 2020.

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 Adam Othman owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool owns shares of Lightspeed POS Inc.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »