Motley Fool investors may be feeling a bit of déjà vu recently in regards to Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD). Lightspeed stock has started to soar in the last while, up almost 50% year to date as of writing. Shares continue to trade at all-time highs and, in the last month alone, climbed another 18% as of writing.
So, of course, many Motley Fool investors should yet again be comparing the stock to Shopify. But really, despite both being e-commerce companies with soaring revenue, the similarities are entirely different when it comes to business models. Despite that, could Lightspeed stock be on the way to hitting $200 in 2021, and perhaps more?
Overvalued, but still…
Remember back when Shopify stock was trading at all-time highs in the triple digits? Again and again, all I read about was how analysts believed the stock would crash. And granted, there were some pullbacks. But analysts revised their estimates. Shopify managed to beat revenue estimates and leave them in the dust.
But still, analysts argued that there are market crashes to considered! Then came the mother of all market crashes coupled with a pandemic. Shopify soared through. And it wasn’t alone.
Lightspeed stock came onto the scene just before the pandemic in 2019. At the time, it was the largest tech initial public offering on the TSX, even higher than Shopify! And while its peer may now be in the quadruple digits, Lightspeed has grown at a far faster rate. Since its IPO, shares have grown 572%. That’s in just 2.5 years. In the first 2.5 years for Shopify, growth was at just 282%. That’s still great but half as great as Lightspeed stock.
Here’s what should excite Motley Fool investors who are considering e-commerce stocks. Whereas many of the peers of Lightspeed stock have boomed in just one or two countries, Lightspeed has hooked itself to launching in as many countries as possible.
It’s done this by not just trying to set up in countries, but acquiring other companies that provide them with a foothold. Since January 2020, Lightspeed stock management has spent about US$2 billion on acquisitions. That’s a major investment, and one that’s already paying off.
During the last quarter, the company saw revenue soar by a whopping 220% year over year, with recurring subscription revenue rising by 115% during that time. The company also updated its guidance for the year, believing it will bring in a total of between $510 and $530 million. That’s about double the year before. Lightspeed stock management seems convinced more investors will come, recently adding even more shares.
Frankly, I believe the wave investors have been waiting for is here. Investors may be wondering if they are too late. But if you believe in the company and its strategy for growth and are ready to hold it for years, you really can’t go wrong. It’s doubtful the company will collapse. While growth in shares may slow, it won’t diminish. So, now is as good a time as any to buy up Lightspeed stock before shares possibly reach $200 by the end of this year.
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 and Shopify. The Motley Fool owns shares of and recommends Lightspeed POS Inc, Lightspeed POS Inc., and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.