2 E-Commerce Stocks That Could Boost Your Wealth in 2023

Two top TSX e-commerce stocks could stage a grand comeback this year.

| More on:
A shopper makes purchases from an online store.

Image source: Getty Images

Most e-commerce stocks suffered a brutal sell-off in 2022 due to high inflation and aggressive rate hike cycles by central banks. However, expectations are high that Lightspeed Commerce Inc. (TSX:LSPD) and Nuvei Corporation (TSX:NVEI) could stage a comeback following last year’s deep losses of 62.1% and 58%, respectively.

Both technology stocks tumbled before 2022 due to short-seller reports and never had a chance to recover. Spruce Point Capital Management claimed in September 2021 that Lightspeed inflated many of its performance metrics. On December 2021, the same firm focusing on short selling and special situation investment opportunities questioned Nuvei’s financial statements and profitability.

Based on market analysts’ forecasts, the two e-commerce stocks could boost your wealth in 2023. Lightspeed could climb from $20.02 per share to as high as $59.86 (+199%) in one year. The 12-month average price target for Nuvei is $72.70, a potential gain of 99.7% from $36.41. As of this writing, Lightspeed and Nuvei have gained 3.48% and 5.81%, respectively, from year-end 2022.    

Powering businesses

Lightspeed Commerce, formerly Lightspeed POS Inc., changed its corporate name in August 2021 to emphasize its goal of becoming the commerce king. The short-seller report that came out soon after continues to haunt this $3 billion cloud-based commerce platform.

In the six months ended September 30, 2022 (first half of fiscal 2023), net losses widened by 66.7% to US$180.74 million versus the same period in fiscal 2022. However, investors should look more at Lightspeed’s growing customer base, strong revenue growth, and large addressable market.

After two quarters in fiscal 2023, total revenue jumped 43.5% year over year to US$357.58 million. Management expects to report adjusted EBITDA losses in the ensuing quarters but is confident it could hit the breakeven level by year-end fiscal 2024 (March 31, 2024).

Strong business momentum

Nuvei went public on September 18, 2020 and raised around US$700 million. David Wismer, the global head of technology investment banking at BMO Capital Markets, said then, “Here’s a business that benefits from that digitization and movement online.” From $46.15 on the first trading day, the stock price rose to as high as $177.94 until the short-seller report came out.

The $5.1 billion global payments technology company hasn’t stopped tapping into new markets. Nuvei is present in more than 200 global markets and maintains key relationships with leading credit card companies like MasterCard and Visa.

Chairman and CEO Philip Fayer is pleased with the momentum, strong volume growth in e-commerce, and multiple new alternative payment methods.

In the nine months that ended September 30, 2022, revenue increased 21.5% year over year to US$622.98 million, although net income declined 44.5% to US$52.6 million from a year ago. Still, Nuvei maintains 30%-plus annual year-over-year growth targets for total volume and revenue in the medium term.

Fayer adds that Nuvei has a much more meaningful and visible presence because of its deep and growing pipeline and is no longer underpenetrated.

Bargain prices but higher risk

Lightspeed Commerce and Nuvei still trade at bargain prices at the start of 2023.  However, you must have a higher risk appetite and patience to own them. While a recession could stifle sales, the companies will continue to benefit from the ever-growing e-commerce industry.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

More on Tech Stocks

work from home
Tech Stocks

Could Lightspeed Stock Be a Big Winner in 2023?

Investors can capitalize on Lightspeed’s low valuation and benefit from the recovery in its price.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Tech Stocks

TFSA Passive Income: How I’m Investing to Make $2,000/Year From Dividends

I am increasing my dividend income by investing in dividend stocks like the Toronto-Dominion Bank.

Read more »

Electric car being charged
Tech Stocks

Is Now The Time to Buy EV Stocks?

EV stocks may be down now, but don't count them out. They'll soon be back up again, so now may…

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

Better Buy: Amazon vs. Apple Stock

While both Amazon and Apple have bright long-term prospects, Apple stock looks like the best tech company to invest in…

Read more »

A stock price graph showing declines
Tech Stocks

Has Blackberry Stock Finally Stopped the Slide?

Blackberry has not yet delivered the kind of financial results that we know it can, but this is about to…

Read more »

Car, EV, electric vehicle
Tech Stocks

Chinese Stocks are Soaring: This TSX Stock Could Gain

Magna International stock could benefit from China's economic re-opening.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

1 Oversold Growth Stock to Buy for Major Returns in 2023

This growth stock could be the best Canadian stock to buy now for 2023, with shares possibly doubling back to…

Read more »

Hands holding trophy cup on sky background
Tech Stocks

Could BlackBerry Stock Be a Big Winner in 2023?

BlackBerry (TSX:BB) stock more than halved last year amid the tech stock selloff. Could 2023 be a winning year for…

Read more »