TFSA Investors: 1 TSX Stock I’d Load Up on in 2026

Lightspeed’s messy post-pandemic story is giving way to a leaner, cash-generating turnaround that could fit perfectly inside a long-term TFSA.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 15, 9:45 pm EDT

| More on: LSPD

Key Points

Lightspeed is refocusing by selling its non-core Upserve business and doubling down on its strongest markets.
The company is growing revenue and improving margins while producing positive operating cash flow and adjusted free cash flow.
The turnaround still carries risk, but buybacks, cash, and payments growth could power long-term TFSA gains.

We’re now well into 2026 with summer on the horizon, but it’s hard to believe how much volatility has already been in place. Yet it’s also a time to really think hard about your long-term goals and start making plans not just for the rest of the year, but the rest of your life.

The Tax-Free Savings Account (TFSA) can be a great place to load up on investments, as every dollar of growth, every capital gain, and every future withdrawal can stay tax-free. Growth stocks can feel uncomfortable after a rough stretch, but the TFSA rewards patience when a company finally turns around. So, let’s look at one to consider on the TSX today.

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LSPD

Lightspeed Commerce (TSX:LSPD) is a Montreal-based software company that helps merchants run the front counter, online store, payments, and back office from one platform. It operates in more than 100 countries, giving it global reach from a Canadian base. Lightspeed stock became a pandemic-era market darling, then collapsed as investors punished unprofitable tech. Yet that beaten-down history makes the 2026 setup more interesting.

So, what’s been happening lately? On Apr. 29, 2026, Lightspeed stock sold its non-core Upserve U.S. hospitality product line to Skyview Equity for up to US$81 million. That includes US$44 million in upfront cash and up to US$37 million tied to an earn-out. The divested Upserve operations contributed about US$140 million in fiscal 2026 revenue, US$26 million in gross profit, and about US$5 billion in gross transaction volume.

The deal also included about 3,200 U.S. hospitality customer locations and around 70 employees. The major cleanup move shows that Lightspeed stock wants to focus on its strongest growth engines: North American retail and European hospitality. After removing Upserve, about 75% of fiscal 2026 revenue came from those core growth engines.

Into earnings

Earnings are around the corner, but even last quarter’s results show why Lightspeed stock deserves another look. In the third quarter of fiscal 2026, revenue rose 11% year over year to US$312.3 million, beating the company’s outlook. Gross profit increased 15%, and gross margin improved to 43%. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to US$20.2 million, up from US$16.6 million the year before. Plus, Lightspeed stock also delivered positive cash flow from operating activities of US$28.9 million and adjusted free cash flow of US$14.9 million.

Still, investors shouldn’t pretend the turnaround is complete. Lightspeed stock reported a net loss of US$33.6 million in Q3, or US$0.24 per share, compared with a loss of US$26.6 million, or US$0.17 per share, a year earlier. However, Lightspeed stock raised its fiscal 2026 outlook, which helps support the buy case. Management now expects fiscal 2026 revenue of about US$1.216 billion to US$1.220 billion, gross profit of about US$523 million to US$525 million, and adjusted EBITDA of about US$74 million to US$76 million.

Looking ahead

So, now, with earnings coming up, cash on hand, and a focused story, where does Lightspeed stock sit for the future? If it keeps moving more merchants onto its payments platform, each customer can become more valuable over time. In Q3, its focus markets, North American retail and European hospitality, grew revenue 21% year over year. Gross transaction volume in those areas rose 16%, and it added about 2,600 net customer locations in those strategic segments.

Yet the other reason it can fit in a TFSA is the balance between risk and reward. A TFSA can shelter big gains if the turnaround works, but investors need to accept volatility. Small merchants can struggle if consumer spending slows. Competition from larger payment and commerce platforms remains intense. The Upserve sale also removes revenue, even if it improves focus.

Bottom line

Even so, Lightspeed stock has cash, improving adjusted profitability, a sharper strategy, and a board authorization with about US$200 million remaining for share repurchases. That gives management flexibility.

For a patient investor, 2026 could mark the year Lightspeed stock finally looks less like a fallen tech stock and more like a focused commerce platform.