The Motley Fool

Here’s What Lightspeed Is Worth One Year Later

Image source: Getty Images

The tech industry as a whole has been on fire this year. While the rest of the market has been jumping up and down, tech seems to have taken over. It’s something very few saw coming, even with a pandemic taken into consideration.

But the reason is clear. What many foresaw as a slow transition happened overnight with the pandemic. Suddenly, everyone need to work from home. This meant two things for the tech industry, such as a rise in ways to keep data safe and that people will still need stuff — a lot of stuff — and all from the safety of their own homes.

That’s why Lightspeed POS Inc. (TSX:LSPD)(NYSE:LSPD) was on fire this year. Again, even without the pandemic, economists believed this stock would be on fire. But that’s been kicked into overdrive. So let’s look at what this stock is worth after such a year, and where it’s headed.

The last year

When Lightspeed first came on the market about two years ago, the stock focused on providing point-of-sale services to mainly small- and medium-sized retail and restaurant businesses. But since then, it’s expanded into the e-commerce market. Now, pretty much anyone can create a platform using Lightspeed — and clearly, many are.

The company posted quarter after quarter of record revenue. Then, the market crash hit, and share value dropped by a whopping 70% peak to trough. It’s what many believed e-commerce companies like Lightspeed would go through, but no one foresaw the expansion within the e-commerce market.

As I mentioned, e-commerce boomed with the work-from-home economy. A company like Lightspeed proved especially beneficial as it allows restaurants to deliver food, retail stores to deliver products, and now anything in between as well. Since so many businesses realize now they need an online presence more than ever, that made Lightspeed’s free trial a clear win.

Today

Fast forward to today, and Lightspeed is trading at all-time highs. During the latest earnings report, customer locations increased by 40% year over year, a 62% increase in revenue, and a 60% increase in gross profit. It also acquired ShopKeep that will help the company continue its expansion throughout the United States.

So to answer the biggest question, let’s say you took your Tax-Free Savings Account (TFSA) contribution room of $6,000 and bought Lightspeed stock on December 31, 2019. Almost one year later, shares are worth about $75 each. At $35.55 per share at closing, that would mean your original investment would be worth $12,658 today! More than double your investment!

The future

Does the future look as bright? In the short term, probably not. The stock has a lot more to prove it can tackle its competitors, but it’s on the way there. That means another market crash may see this stock plummet as it did before, but maybe not quite so severely.

But if you’re looking for a buy and hold stock, if it does dip it could be an incredible time to pick up Lightspeed stock. The company has been on a tear, and it looks like it will continue for some time.

As e-commerce continues to grow and change, Lightspeed seems to be able to roll with the punches. So buying it at a low could be just the thing your portfolio needs.

Still worried about cash this year? Motley Fool experts are doubling down on this stock!

Motley Fool Canada Makes 5G Buy Alert

5G is one of the greatest arrivals in technology since the birth of the internet. We could see plenty of new wealth-building opportunities in 2021 that would potentially dwarf any that came before them.

5G has the potential to radically change our lives and society as we know it, but if you’re an investor, the implications are even greater — and potentially much more lucrative.

To learn more about it and its revolutionary potential to change the industry — and potentially your bank account — click on the link below to get the full scoop.

Learn More Today!

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 Amy Legate-Wolfe owns shares of Lightspeed POS Inc. The Motley Fool owns shares of Lightspeed POS Inc.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.