Shares of Lightspeed Commerce (TSX: LSPD) have been climbing slowly but surely, though lately it seems slowly hasn’t been the right word. LSPD stock jumped 14% in about a week for shareholders. So let’s look at what’s been going on, and if more upside is ahead for Lightspeed stock on the TSX today.
The rise
It seems that perhaps the rise in share price came from some insider trading from C-suite employees at Lightspeed last week. On December 15, 2023, former chief executive officer Dax Dasilva, current CEO JP Chauvet, and the chief marketing officer exercised their rights to shift from restricted shares to subordinate voting shares.
Restricted stocks are those that come with conditions when purchased by owners. However, subordinate voting shares offer, well, the right to vote! And it seems there has been a lot going on that these C-suite employees wish to vote on. Or at least, perhaps there will be.
So let’s glimpse at what the future might look like for Lightspeed stock.
Eating it up
When it comes to ecommerce and point-of-sale companies, Lightspeed stock has remained focused on the biggest and the best. This also includes in the restaurant sector, where many companies continue to use legacy platforms.
Lightspeed stock is changing that, and demonstrated its worth recently with data coming from its “thousands of restaurants and bars powered by Lightspeed” across the United States. The goal was to demonstrate how Lightspeed stock can deliver data that will allow their restaurant clients to increase revenue, thereby increasing Lightspeed stock’s as well.
In this dataset, Lightspeed stock found that many restaurant attendees will be looking to indulge over New Year’s Eve. Whether it was demand for caviar, or seeing a 111% increase in sales on sparkling wine, it seems as though last year’s median cheque size will increase again. In 2022, this hit $53 per patron, up 4% from December 2022 and 10% since New Year’s Eve 2021.
How Lightspeed stock benefits
This data isn’t just for funsies. Lightspeed stock hands out this data in order to see their own revenue increase. The better their clients do, the better the company does. What’s more, the more new enterprise-level clients it can bring in.
It’s clear that Lightspeed stock will be able to continue this trend of helping their clients do well throughout 2024. And it’s likely why there have been upgrades in the company’s share price, most recently by JP Morgan.
Yet Lightspeed stock is currently undervalued based on recent growth reflected in its earnings, as well as momentum from its future growth opportunities. Shares trade at just 3 times book value as of writing. What’s more, its enterprise value (EV) over earnings before interest, taxes, depreciation and amortization (EBITDA) is absurdly low. It trades at just -3.1 EV/EBITDA, which means the total value of its cash is more than the total of its combined market cap and debts.
So if you’re looking for a company that continues to see profits rise, debt come down, and shares grow as well, Lightspeed stock is certainly your answer. Even if we see another 14% rise in share price in the next week as well.
