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Nuvei vs. Lightspeed: Which Is the Better Tech Stock?

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Canada’s technology sector has been forced to do some heavy lifting on the markets and in the regular economy in the face of the COVID-19 pandemic. Canadian investors may not have the tech stock selection that we see south of the border, but there are some high-quality options on the TSX. Today, I want to zero in on Nuvei (TSX:NVEI) and Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD). Which tech stock is the better buy in early September? Let’s dive in.

Nuvei has been an explosive tech stock as it nears its one-year anniversary on the TSX

Nuvei made history with the most valuable tech IPO in history on the TSX in September 2020. The Montreal-based company provides payment technology solutions to merchants and partners in Canada and around the world. Shares of this tech stock have climbed over 120% in 2021 as of close on September 1. The stock is up over 250% from the prior year.

Investors should be excited about Nuvei’s potential going forward. MarketsAndMarkets released a report on the global payment-processing solutions market earlier this year. It projected that the market would grow to $120 billion by 2025, which would represent a CAGR of 10% during the forecast period.

In Q2 2021, Nuvei delivered revenue growth of 114% to $178 million. Adjusted EBITDA climbed 112% to $79.4 million. The company achieved triple-digit volume increases in all four of its regions. This was the key driver for its business in the second quarter. Management bolstered its financial outlook for the full year in response to the strong first half of 2021.

Why Lightspeed has gained huge momentum since early 2020

The e-commerce space has seen massive growth since the beginning of the COVID-19 pandemic. Traditional retailers with brick-and-mortar footprints were forced to evolve on digital platforms. This drove many companies into the arms of entities like Lightspeed.

Lightspeed is another Montreal-based company. It provides commerce-enabling Software-as-a-Service (SaaS) platform for small and midsize businesses. Shares of this tech stock have climbed 70% in 2021 as of close on September 1. The stock has soared over 200% in the year-over-year period.

Investors got a look at its second-quarter 2021 results on August 5. Total revenue soared 220% year over year to $115 million. Meanwhile, its adjusted EBITDA loss improved to $6.0 million. Lightspeed also posted record gross transaction volume and consumer locations. It partnered with OpenTable and announced definitive agreements with NuORDER and Ecwid. Nuvei is well positioned for big growth in this evolving climate.

Which tech stock is the better buy?

Nuvei and Lightspeed have both put together an incredible performance over the past year. As far as value is concerned, both tech stocks have shown signs of overheating. Both are also threatened by the rise of the Delta variant, which could slow business momentum in the months ahead. In any case, I’m more inclined to snatch up Nuvei for its high growth potential and excellent balance sheet. Lightspeed is on a nice track in the e-commerce space, but it is still fighting to achieve profitability in a highly competitive sector.

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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Lightspeed POS Inc and Lightspeed POS Inc.

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