Lightspeed Stock Fell 15% in November – Is it a Buy Today?

Lightspeed stock may have a rough 2023, but that doesn’t mean you should ignore it, even after shares dropped .

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Lightspeed Commerce (TSX:LSPD) continues to be a stock to watch this year. Especially heading into the New Year and a potential recession. Shares of Lightspeed stock fell 15% in the last month, yet have climbed about 12% from mid-November to date. So what should investors do with Lightspeed stock right now?

The Bear case

One major consideration investors should take to heart for Lightspeed stock is that we are due for a recession in 2023. We could see even more of a decline in the tech stock, given that it relies on the consumption of products and services.

Lightspeed saw a recovery from its point-of-sale service during the last year, it’s true. Pandemic restrictions lessened leading to more in-store sales. However, a recession is likely to pull sales back yet again, and we’ll still be dealing with lower sales from e-commerce.

Therefore, LSPD stock could be in for another drop in the coming months. And if that should happen, even today’s potential deal won’t look so great in 2023.

The Bull case

That all taken into consideration, it’s also important to note that here at the Motley Fool we recommend long-term holds. Because of this, Lightspeed stock looks like it could be an incredible deal for those seeking long-term returns.

The tech stock beat earnings estimates the last two quarters in a row. During its most recent quarterly results on November 3, it announced year-over-year revenue up 38%, surpassing the outlook. Further, customer locations saw about 25% year-over-year growth in gross transaction volume (GTV).

All of this is great news at a time when sales continue to be down in the e-commerce sector. However, e-commerce is still a part of our future. After a recession, Lightspeed stock and its past acquisitions will return to even stronger growth. And it looks like some of that growth should continue even during the recession as well, thanks to the company’s “land and launch” approach across the world.

So is it a buy?

Lightspeed management admitted that it’s going to be a tough few months during the recession. Sales aren’t likely to remain as strong, but the company has a history of underselling and overperforming. Because of this, I’d say Lightspeed is definitely worth some consideration.

This could be based on fundamentals alone, to be honest. Lightspeed stock currently trades at 0.78 times book value, with shares down 56% year to date. Furthermore, it’s in a strong financial position, especially compared with its other tech peers that grew too fast, too soon.

Shares of Lightspeed stock have grown 19% since coming on the market. That, of course, is after the massive drop off from all-time highs of $160 in September 2021. While I don’t think those levels will be reached any time soon, I do believe Lightspeed has major growth in its future within the e-commerce industry. Especially for long-term investors who are looking for positive returns for the next decade and beyond.

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 has positions in Lightspeed Commerce. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

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