Why Lightspeed Stock Rose 9% Last Week

Its latest quarterly results and top leadership changes kept Lightspeed stock highly volatile last week.

| More on:
Hand arranging wood block stacking as step stair with arrow up.

Image source: Getty Images

What happened?

Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock jumped by about 8.9% last week to settle an extremely volatile week in the green territory. With this, LSPD stock ended its five-week-long losing streak. Year to date, its stock is still trading with more than 21% losses compared to a minor 0.2% rise in the TSX Composite Index.

So what?

Most tech stocks started last week’s trading on a solid note. The U.S. Federal reserve’s latest move to keep key interest rates unchanged in January came as a relief for investors who were hoping for an aggressive monetary policy tightening to fight inflation. This policy move led to a rally in tech stocks on Monday last week, and Lightspeed stock inched up by nearly 19% in the first couple of days of the week.

However, tech stocks turned negative again on Wednesday after the release of a much worse-than-expected U.S. non-farm employment report. That’s why LSPD stock trimmed its weekly gains later during the week, losing 11% of its value on Wednesday and Thursday combined.

Amid this heightened volatility, Lightspeed also announced its third quarter of the fiscal year 2022 (ended in December 2021) results last week. Its latest quarterly results managed to beat Street analysts’ expectations. The Canadian commerce platform provider’s total revenue rose by 165% from a year ago to US$152.7 million — 6% better than analysts’ estimates. Similarly, the company reported an adjusted net loss of US$0.07 per share, which was better than the expectations of a US$0.09-per-share loss.

Its better-than-expected financial results seemingly helped LSPD stock pull back later during the week, as the pressure from the tech sector-wide selloff gradually subsided. That’s why the stock ended the week with nearly 9% gains.

Last week, Lightspeed also tried to regain investors’ confidence by making some big changes in its top leadership as its president JP Chauvet replaced Dax Dasilva as the new CEO.

Now what?

Despite its handsome recovery last week, we must remember that Lightspeed stock has consistently been trading on a bearish note for the last five months. This bearish trend started in September last year when a New York-based short-seller made several serious allegations against Lightspeed and its management. While most Street analysts remained positive on LSPD stock, even after the release of this short report, it certainly hurt investors’ sentiments, fueling a big selloff in the stock.

Nonetheless, investors might not ignore the fact for long that Lightspeed continues to beat Street’s expectations with solid sales growth. Its consistent growth could help LSPD stock recover in the medium term, I believe.

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.

The Motley Fool recommends Lightspeed Commerce. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Tech Stocks

A worker uses the cloud for paperless work. tech
Tech Stocks

Why I Think Constellation Software (TSX:CSU) Stock Has Market-Beating Potential

Constellation Software (TSX:CSU) could outperform the market over the next few years.

Read more »

Technology, internet and networking, security concept
Tech Stocks

Why Blackberry Stock (TSX:BB) Fell 16.5% in September

While general macroeconomic weakness hit Blackberry stock hard in September, the company has a lot to look forward to.

Read more »

Electric car being charged
Tech Stocks

3 Stocks That Could be Worth More than Tesla by 2032

Tesla stock is riding high, but these three stocks could someday eclipse it.

Read more »

Lady holding mobile phone and shopping bags
Tech Stocks

Why Shopify (TSX:SHOP) Stock Fell 5% in September

Shopify Inc (TSX:SHOP) fell 5% in September. Can it rise again?

Read more »

Online shopping
Tech Stocks

Why Shopify Stock and Other Tech Stocks Jumped on Tuesday

Shopify (TSX:SHOP) stock and others started climbing on Oct. 4, but will the rise continue or fall back?

Read more »

healthcare pharma
Tech Stocks

2 Top TSX Tech Stocks to Buy in October

TSX tech stocks have been trampled in 2022. Yet, here are two top stocks on my buy-list that could have…

Read more »

Growing plant shoots on coins
Tech Stocks

2 TSX Growth Stocks I’d Buy and Hold Forever

Investors can buy these growth stocks at significant discount and benefit from the steep recovery in their prices.

Read more »

A stock price graph showing declines
Dividend Stocks

Here’s Why I’m Confident About Investing Through the Down Market

There is no bear market in history that has not been followed by a bull cycle. Rather than fret over…

Read more »