1 Canadian Tech Stock I’d Buy Before Shopify Stock

If you’re looking for a tech stock with sustained growth, that may not be Shopify stock at this point. Instead, consider this top tech stock.

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Many Canadians swarmed Shopify (TSX:SHOP) when it started to rise a few years back. The thing is, the tech stock was doing well for a while. And with the momentum of e-commerce behind it, the climb only continued.

That being said, there were still other companies around that you could have invested in. Ones that, frankly, I would even choose over Shopify stock on the TSX today. Even if it rises back from the ashes.

Why not Shopify stock?

First off, I’m not saying you shouldn’t invest in Shopify stock. It’s a great Canadian tech stock that should be on your radar in the future. But that’s just it, in the future. Right now the market is so incredibly volatile. There are many Canadians who likely lost a fair amount of money from investing in growth stocks that are now down in the dumps.

One of those included Shopify stock. The tech stock climbed to all-time highs of $228 (adjusted for the stock split), before falling by over 80%. Shares have yet to recover even close to that amount. As of writing, Shopify stock is still down by 28% in the last year, though up 32% year to date.

And it’s this last part Canadians are questioning when it comes to the tech stock. The company made some moves that made stockholders happy in the short term, which included mass firings. But this also speaks to the company’s continued volatility. And it’s why instead of looking at Shopify stock, in the next year at least, I would look to this one instead.

Consider Lightspeed stock instead

Lightspeed Commerce (TSX:LSPD) isn’t without its share of volatility. After all, shares of Lightspeed stock also dropped off the planet, but far earlier. The tech stock was targeted by short sellers, falling 30% in a day after a report came out. It also led to the Chief Executive Officer Dax DaSilva stepping back into an executive leadership role.

Now, the tech stock is in a different position. Yet there’s a major difference. While it has had its share of layoffs, it’s on track to hitting a profit in the near future. That’s saying quite a lot, considering the company made over US$2 billion in acquisitions over the last few years.

Analysts weren’t sure if these would start paying dividends, but according to earnings they certainly have. The company’s earnings continue to come out far ahead of estimates, reporting 24% growth in year-over-year revenue during its last earnings report. Furthermore, this was higher than its own established outlook. This included its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) outlook as well.

While it still operates at a loss, Lightspeed’s acquisitions and growth have LSPD stock pegged at reaching a profit by fiscal 2024.

Bottom line

Popularity can certainly swing to growth in a stock price. But honestly, Shopify stock may climb in the near future for a while, but this could lead to another drop. Instead, I would consider Lightspeed stock for sustained growth. Shares remain down 49% in the last year, and up just 6% year to date. So I’d lock in this deal while it lasts.

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

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