Lightspeed Commerce Jump: What Should Investors Do Now?

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) jumped after a partnership with The Bay, but analysts believe it should keep climbing.

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Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) shares climbed 10% on Tuesday, the largest jump since the short-seller report claiming the company’s metrics were “smoke and mirrors.” But the jump is something analysts feel is a long time coming. So, what should investors do now?

What happened?

Shares of Lightspeed Commerce climbed 10% after the company announced a partnership with The Bay through its NuORDER acquisition. NuORDER will be helping take The Bay into the next step of its growing e-commerce company. The Bay recently saw its sellers grow by leaps and bounds, and needs a company to help facilitate its growth.

The Bay may be a recognizable name, but it remains the sixth-highest e-commerce company in the country. This is down from the second top spot just a few years back. So, this partnership with Lightspeed Commerce could prove fruitful for both companies.

So what?

This timing couldn’t be better for Lightspeed Commerce, and that’s in more ways than one. The news sent shares climbing, as this is a major brand taking on the volatile tech company. Yet in the past few months, with shares dropping more than 60% from all-time highs, analysts believed such a jump would eventually be on the way.

Analysts remained at a target price of $125 per share, even after the short-seller report. While this is a correction from the nearly $160 price back in September, it’s about double of today’s share price. This comes from a company that is growing strong and making partnerships like the one with The Bay in an industry it knows well: retail.

Given that the pandemic is still very much a part of our lives, focusing in on retail and restaurants offers a way to help these merchants survive and thrive. The Bay is no exception, and it needs to find a way to bring in more revenue in a time where in-store shopping remains low.

Now what?

Shares of Lightspeed Commerce may be up, but they aren’t anywhere near all-time highs. In fact, just to reach the target price that would double today’s share price. So, that still gives investors a strong opportunity to get in on the tech stock while they can.

In fact, there could now be some weight off of Lightspeed Commerce. Nuvei recently became the target of another short-seller report, again by Spruce Point Capital Management. While you can read about the Nuvei report in another article, it was along the same lines of the Lightspeed report. The report claims the metrics weren’t truthful, and Spruce Point estimates a 40-60% downside. Nuvei shares fell by 55% in a day, almost double what happened to Lightspeed Commerce.

With focus elsewhere, investors may start to pick up Lightspeed Commerce again. And that’s backed by analysts. The recent dropping continued out of fear, and that’s when investors should get greedy. And I would do it soon, because you may not have much time left before shares take off once more.

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 Nuvei Corporation. The Motley Fool recommends Lightspeed POS Inc.

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