Motley Fool investors may feel a bit queasy when I start talking about Lightspeed Commerce (TSX: LSPD)(NYSE: LSPD) as a stock to buy on the TSX today. I wouldn’t blame you. Lightspeed stock lost most of its value over the last year — all of it happening within the last six months or so.
While there are a few reasons that could fall into Lightspeed stock management’s hands, most of the fall is out of the company’s control. And that makes it one of the best bargains for Motley Fool investors on the TSX today.
The blame game
First off, the fall in Lightspeed stock came at the perfect time for short-sellers. The short-seller report that came out in September 2021 claimed the company hid behind metrics that acted like “smoke and mirrors.” Further, that the acquisitions the company made were not performing as hoped.
However, management not only came out and said this was all false but soon brought several of its acquisitions online. These acquisitions have led to partnerships with some major companies and more revenue.
Yet the company remained unprofitable, having spent over US$2 billion in acquisitions, leaving investors skeptical. Add to that the fall in tech stocks, and investors weren’t happy. So, Lightspeed stock had a management shakeup, keeping Dax Dasilva on as a board executive.
Turn around
It’s frustrating for investors in Lightspeed stock to see the company performance during this time, as it continues to make progress in terms of its earnings and performance. But it must be so much harder on management. The company went through a turnaround over the last few months, with its acquisitions bringing in substantial revenue. But more good news came as well.
Lightspeed stock launched Lightspeed Restaurant in North America and Europe just in time for many COVID-19 restrictions to fall away. So, just as e-commerce started to dwindle as inflation rose, people were able to flock back to retail and restaurant locations. This is great news for Lightspeed stock, as its point-of-sale system continues to be a large part of its business.
What’s more, this economic downturn won’t last forever. So, in the pretty near future, Motley Fool investors can look forward to the company bringing in substantial revenue from both in-person and online sales.
Prove it
Let’s look at the numbers, so you get a clear picture of the kind of bargain you’re getting here. First, there’s the performance I’ve mentioned. During the company’s last earnings report, fourth-quarter revenue was up 78% year over year, with gross transaction volume (GTV) up 71%. Further, gross product volume (GPV) soared by 132% compared to 2021 at a time when supply lags hurt e-commerce demand.
Now, the company does still operate at a loss from all the investments. Net loss climbed to $114.5 million from $42 million from acquisition-related costs but also from the drop in share price. Adjusting for these items, the loss was actually just $22.9 million — half of last year’s loss.
As for this year, the company expects revenue between $740 and $760 million, with the first quarter reaching $165-$170 million. We’ll see if this comes to fruition when earnings come out August 4.
Foolish takeaway
Lightspeed stock now looks like a bargain on the TSX today thanks to its present performance and future potential. Shares are down 44% year to date and 73% in the last year. It trades at a price-to-book ratio of just one, and sales are expected to continue climbing. That makes this one of the best stocks you can pick up for a major bargain.
