Can Lightspeed Stock Finally Recover in 2024?

Down 88% from all-time highs, Lightspeed is a TSX tech stock that can deliver outsized gains to shareholders in 2024.

| More on:
think thought consider

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Canada-based fintech company Lightspeed Commerce (TSX:LSPD) has burned massive investor wealth. The TSX stock went public in early 2019 and currently trades 88% below all-time highs. Valued at $2.9 billion by market cap, Lightspeed Commerce has trailed the broader markets by a wide margin, having gained just 1% since its initial public offering.

In this article, we see if Lightspeed stock can stage a comeback and deliver outsized gains to long-term shareholders.

Created with Highcharts 11.4.3Lightspeed Commerce PriceZoom1M3M6MYTD1Y5Y10YALL30 Jul 201929 Jul 2024Zoom ▾Jan '20Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '2420202020202120212022202220232023202420240www.fool.ca

An overview of Lightspeed Commerce

Lightspeed Commerce offers small and medium enterprises a platform that unifies digital and physical operations by enabling multi-channel sales, expansion to new locations, global payments, financial solutions, and connections to supplier markets.

Lightspeed’s cloud-based omnichannel commerce platform serves a growing and diverse customer base. The company is well-capitalized and is part of a large total addressable market, which should drive future revenue and earnings higher.

A strong performance in fiscal Q4 of 2024

Lightspeed reported revenue of US$230.2 million in the fiscal fourth quarter (Q4) of 2024, an increase of 25% year over year. Its transaction-based sales stood at US$139 million, up 40% compared to the year-ago period. Meanwhile, subscription sales stood at US$81.3 million, 7% higher than the same period last year.

Lightspeed delivered an adjusted income of US$8.5 million or US$0.06 per share, compared to a loss of US$0.4 million last year. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of US$4.4 million indicated a margin of less than 2%, but the company is now positioned to benefit from economies of scale and high operating leverage.

Lightspeed ended fiscal 2024 with US$722.1 million in cash, providing it with enough flexibility to tide over an uncertain macro environment and support its cash-burn rate.

“On the back of a strong fourth quarter, Lightspeed is coming into the new fiscal year with a revitalized sense of energy and purpose,” said Dax Dasilva, founder and chief executive officer. “I am excited to be guiding the company through the next phase of its evolution. With the strongest product offerings we have ever had and a renewed commitment towards product innovation, Lightspeed is continuing to accelerate its sustainable and profitable growth.”

Is LSPD stock a good buy right now?

Lightspeed believes 2024 was a milestone year for the company as it exceeded its revenue outlook and achieved a full year of positive adjusted EBITDA for the first time. It remains focused on its flagship offering and is on track to end fiscal 2025 with more than US$1 billion in sales by increasing subscription revenue and the customer base.

Lightspeed’s average revenue per user rose 29% to $431, while the average net retention rate stood at 110%, which suggests that existing customers raised spending by 10% in the last 12 months.

Lightspeed forecasts to increase sales by at least 20% year over year in fiscal 2025, while adjusted EBITDA is estimated at more than US$40 million.

An asset-light model should help the company expand adjusted earnings per share from US$0.16 per share in fiscal 2024 to US$0.35 in 2025 and US$0.55 in 2026.

Priced at 38.5 times forward earnings, LSPD stock is not too expensive, given its earnings estimates. Analysts tracking LSPD stock remain bullish and expect it to gain around 40% in the next 12 months.

Should you invest $1,000 in Lightspeed right now?

Before you buy stock in Lightspeed, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Lightspeed wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Lightspeed Commerce. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Tech Stocks

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

data center server racks glow with light
Tech Stocks

April Opportunity: Where I’d Invest $7,000 in These 3 Tech Stocks Right Now

These tech stocks have solid growth potential and are trading at discounted valuation, providing a solid buying opportunity in April.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

If I Could Only Buy and Hold a Single U.S. Stock, This Would Be It

You don’t need 40 different stocks to build wealth. A few good ones can boost your portfolio, and this U.S.…

Read more »

cloud computing
Tech Stocks

2 Top Canadian Information Technology Stocks to Buy Right Now

These two Canadian information technology stocks are bargains amid the downturn in the broader market for long-term investors.

Read more »

A microchip in a circuit board powers artificial intelligence.
Tech Stocks

The Only 2 AI Stocks You’ll Need for Long-Term Growth

Here are two top Canadian tech stocks that could help you benefit from surging demand for AI technology and infrastructure.

Read more »

calculate and analyze stock
Tech Stocks

The Canadian Stock I’d Buy Every Time it Takes a Dip

The tariff wars have created a buy-the-dip opportunity for value investors. Here is a Canadian stock that is a buy…

Read more »

jar with coins and plant
Tech Stocks

The Smartest Growth Stock to Buy With $1,000 Right Now

Here's a fundamentally solid, dividend-paying growth stock you can buy on the dip now to hold for the long term.

Read more »

e-commerce shopping getting a package
Tech Stocks

Shopify Stock Looks Like a Buying Opportunity Today

Let's dive into the pros and cons of owning e-commerce platform provider Shopify (TSX:SHOP) in this current environment.

Read more »