Tech stocks did well during 2020, and that couldn’t be truer for point-of-sale and e-commerce companies. These companies continue to be some of the best on the TSX today, and that remains true for Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) and Nuvei (TSX:NVEI). But between Lightspeed stock and Nuvei stock, which is the better long-term hold?
Today, we’re going to dive into both Lightspeed stock and Nuvei stock and see whether one outweighs the other. We’ll do that by looking at how the companies have grown, where the future lies, and, of course, the fundamentals.
But first, growth
Now it’s a touch unfair to compare Nuvei stock and Lightspeed stock when it comes to growth. After all, Nuvei has only been on the market for just under a year. But it’s not like Lightspeed has a huge advantage; it’s only been on the market since March 2019.
But in that time, both have grown shares substantially. Lightspeed is up 524% since its initial public offering (IPO), and Nuvei is up 182%. And it’s not just share price that’s been growing in that time.
Lightspeed stock in particular has been growing through major acquisitions. This has created a chance to become the largest e-commerce platform in the world. It’s taken on a land-and-launch approach, buying up companies and starting small, then spreading as wide as possible to become the go-to global platform.
Nuvei stock has also been growing incredibly. The e-commerce company saw volume climb 146% year over year during its latest earnings, with 84% coming from e-commerce sales. It recently expanded into sports betting as well — a major source of expanding revenue.
But when it comes to market capitalization, both are almost the same. Nuvei sits at $17.65 billion, with Lightspeed stock $16.85 billion as of writing.
Let’s move on to future growth as an insight.
Both stocks look poised for greatness in the future, and this comes from the shift to e-commerce as a whole. E-commerce is set to outpace in-store retail by the end of the decade, sped up by the recent pandemic. So, it’s likely these two companies will be able to continue an acquisition approach in the near future, becoming as large as possible in a short period of time.
But there’s a major difference between Nuvei stock and Lightspeed stock today, and that’s where your decision could lie. Nuvei stock is a digital payment-processing company, providing payments to over 200 markets around the world, even accepting cryptocurrency. Lightspeed stock, however, has changed tack. It used to be a point-of-sale service, similar to Nuvei. But now, it’s looking larger. It wants to be a top e-commerce stock and has changed its name to match: it’s now Lightspeed Commerce instead of Lightspeed POS. Management continues to find new ways to keep investors excited, so perhaps shareholders should continue to watch this climbing stock.
Fundamental Foolish takeaway
So, which is it, Lightspeed stock or Nuvei stock? Honestly, in today’s market you can’t go wrong with either, and analysts agree. Even after so much growth this year, analysts are bullish about both stocks. But today, Lightspeed stock may be a touch more affordable. It offers a price-to-book ratio of 6.83 compared to Nuvei’s 9.39 as of writing. But honestly, both are in a booming industry set to soar. Even if there’s a dip, holding onto these stocks long term can’t be bad for your tech portfolio.
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 and recommends Lightspeed POS Inc. The Motley Fool recommends Lightspeed POS Inc.