Tesla (NASDAQ:TSLA) stock has been getting a lot of attention over the past year. After its S&P 500 Index inclusion, it quickly skyrocketed to US$880. Since then, it has given up much of those gains and has reverted its pre-S&P 500 prices.
If investors bought into the hype about Tesla a little too much, you can’t blame them. The company is delivering sky-high revenue growth, with sales up 71% in the most recent quarter. The five-year annualized sales growth rate is 53%.
Certainly, that’s a lot of growth. But there’s one TSX stock that has it beat. In its most recent quarter, its revenue grew by a stunning 127%, leaving Tesla in the dust. It may not have the name recognition that Tesla does, but it’s a smaller company with more room to grow. In this article, I’ll explore this one TSX tech stock that’s growing faster than Tesla.
Lightspeed POS (TSX:LSPD)(NYSE:LSPD) is a Canadian retail POS company. It offers tablet-based point of sale (cash register) systems for stores, restaurants, bars, and more. It was a pretty high-growth company when it went public in 2019. In its first quarter as a publicly-traded company, it grew its revenue by 36% year-over-year. Since then, its revenue growth has accelerated. As mentioned, it grew at 127% in the most recent quarter. In the quarter before that, it grew at 79%. Both of these growth rates are way ahead of Tesla and could easily continue into the future, as I’ll show in the same section.
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Why it has so much growth potential
The reason why Lightspeed has so much potential is that it’s positioned in two industries that could each thrive in completely different scenarios, specifically retail POS and e-commerce.
The COVID-19 pandemic was a massive boon to the e-commerce industry. Companies like Lightspeed and Shopify saw their sales surge thanks to the spike in online shopping. There’s been much concern that when the pandemic ends, the e-commerce boom will slow down. If it does, that will be a real setback for Shopify, though much less so for Lightspeed. Many of LSPD’s e-commerce vendors started off as customers already using its retail POS software.
When the pandemic hit, customers switched from retail POS to Lightspeed e-commerce. That’s why Lightspeed’s e-commerce GTV has consistently grown more than retail GTV: Retail took a hit while e-commerce thrived. Insofar as Lightspeed benefited from lockdowns, it’s in the same boat as Shopify. Unlike Shopify, however, it already has loads of customers ready to move back to retail POS when we get back to business as usual. That positions Lightspeed admirably among payment processing companies, few of which possess that kind of flexibility.
Over the years, Tesla has become almost an institution in financial media. Thanks to its charismatic founder and “Techno King” Elon Musk, it has dazzled the press. But in fact, its growth metrics aren’t unusually high for young tech stocks. As we’ve seen in this article, there is one obscure Canadian tech company that’s handily beating it on revenue growth. And there are others.
If you're interested in Tesla you should read this:
There’s a dark horse Canadian company that has produced 3 TIMES the number of vehicles as Tesla, yet its stock trades for roughly 25x LESS!
We’re convinced this under-the-radar Canadian disruptor that’s less than 5% the size of Tesla could be one of the best growth stocks of 2021 and beyond.
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. David Gardner owns shares of Tesla. Tom Gardner owns shares of Shopify and Tesla. The Motley Fool owns shares of and recommends Shopify, Shopify, and Tesla. The Motley Fool owns shares of Lightspeed POS Inc and recommends the following options: long January 2023 $1140 calls on Shopify and short January 2023 $1160 calls on Shopify.