Shopify (TSX:SHOP) and Lightspeed Commerce (TSX:LSPD) were both heavy hitters in the tech stock sector during the pandemic. As ecommerce grew, these ecommerce and point-of-sale companies exploded. Yet, that all changed once the pandemic restrictions were lifted.
Since then, shares of Lightspeed and Shopify stock have climbed, fallen, and climbed again. But which is the better buy today?
Image source: Getty Images
Shopify stock
Shopify stock is perhaps the obvious choice for investors looking into tech stocks. The company collapsed in share price once restrictions were lifted, but dropped even further as the e-commerce platform started to shed cash.
Shopify stock went on to go through lay offs, cuts, and the sale of its logistics business. All to bring in cash. Every time this was accomplished, Shopify stock would start to climb back. Shares are now up about 70% in the last year, as of writing. But is it enough?
Second-quarter results would have some investors thinking it is. There was a rise across the board in terms of important items such as revenue and gross merchandise volume (GMV). And Shopify stock has renewed its focus on ecommerce, adding artificial intelligence (AI) to the mix. With AI, it hopes to create a smoother, easier way for both customers and merchants to use the program.
Now, third-quarter results are around the corner. What’s more, this will be followed by the company’s historically highest sales weekend of the year! Black Friday to Cyber Monday should prove quite lucrative even in this market. So, there is certainly reason for investors to continue their interest in the stock.
Lightspeed stock
That’s not to say that investors should stay away from Lightspeed stock either, however. The company has gone through its own turbulent past. While LSPD shares dropped during the lifting of pandemic restrictions, it also saw a drop from a short-sales report.
Since then, Lightspeed stock has also gone through lay offs, attempting to find ways to cut back on cash flow. That can be difficult, considering the company spent US$2 billion in acquisitions during the pandemic. While these acquisitions are now paying dividends, it’s still a hefty bill to hold on to.
It doesn’t seem to be enough, in terms of investor interest. Shares are down 25% in the last year, despite beating earnings estimates, over and over again. Yet, the company has always maintained a realistic approach to its outlook, rather than providing only a sunny picture. This has caused investors to remain relatively on guard of the stock.
Because of this Lightspeed stock isn’t likely to suddenly spike as it did years back. Not while we’re in this downturn, at least. Once the market improves and the company is able to show that it’s still the strong tech stock it’s always been, however, then we could see some real growth.
Bottom line
When it comes to choosing between Lightspeed or Shopify stock, both are strong companies that have been beating earnings estimates. They’re likely to continue this in the future. However, it looks as though Shopify stock might come out ahead when it comes to share growth, but may also come with volatility.
If you’re looking for quick growth, then Shopify stock might be your answer. But keep an eye on Lightspeed stock as well. When the market recovers, you may regret not buying it at these cheap prices. But patience will be a virtue.
