Lightspeed Commerce (TSX: LSPD) is a Canadian tech stock that has seen a lot of ups and downs since debuting on the TSX in March 2019. It went public for $18.90 per share, climbing close to $160 per share in September 2021.
As of this writing, Lightspeed Commerce stock trades for $24.66 per share, down by over 84% from its September 2021 all-time high.
It is safe to say that Lightspeed stock has had an interesting run in the short time it has been a publicly traded company in Canada. E-commerce companies, in general, saw a significant increase in share prices amid the pandemic. However, the drop came hard and fast for many of them. The release of a short-seller report saw Lightspeed share prices decline by 30% in a day.
The sudden decline in Lightspeed stock was followed by a meltdown in the broader tech sector a little while later. Lightspeedâs major downturn forced the companyâs founder to move into an executive role and leave the chief executive officer (CEO) chair to J.P. Chauvet.
How things look today
Since then, the situation for Canadian tech stocks seems to be improving. Several tech stocks saw a bit of a rebound, yet Lightspeed stock remains at a fraction of its meteoric all-time high levels. The $3.77 billion market capitalization point-of-sale and e-commerce software provider has made several acquisitions and expansion projects. Recently, it has restructured itself as a more streamlined business.
From smaller-scale businesses to large enterprise companies, Lightspeed Commerceâs offerings are increasing with more focused acquisitions. It currently aims to unify all the merchants using its Lightspeed Payments platform, with the goal of getting at least half of the merchants working with the company to start using this platform before 2026.
Improving financial performance
Lightspeed Commerce stock saw its share prices rise earlier more due to its anticipated growth potential than tangible results. After a few years of trading, its share prices keep lagging. However, the business itself seems to be doing much better. During its second-quarter results, Lightspeed stock saw a 25% growth in its total revenue from the same period last year.
While it is still not a profitable company, it has brought its net loss down to 47%. The company also reported a 26% year-over-year uptick in its software-adjusted revenue per user. With the adoption of unified payments being the main factor, Lightspeed is now targeting profitability in 2024.
With the adoption of its unified payments vertical already picking up pace, it can anticipate a growing number of larger clients making the shift as well.
Foolish takeaway
As the company continues to take a focused approach to achieving its goals through clear-cut acquisitions and growing its customer base, analysts anticipate Lightspeed will outperform the broader market in the near future. The more its larger enterprise clients see success, the more new investors and institutions will jump on the bandwagon.
As inflation slows and interest rate cuts linger on the horizon, a bull market is expected to arrive sometime this year. If you have been wondering whether it might be a good idea to add Lightspeed stock to your holdings, now can be a good time as any to do it.
