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Written by Adam Othman at The Motley Fool Canada
Investing in technology has become a major trend since the pandemic struck and led to the perfect conditions for some of the top tech firms to boost their performance on the stock market. One of the most prolific performers on the stock market has been Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD), formerly known as Lightspeed POS.
At writing, the stock’s incredible run since its IPO has seen its share price grow by over 720%. The capital gains are highly impressive for just over a couple of years of trading on the TSX. The real question is, is this it, or is there more to come?
Lightspeed stock has been on a strong run since readjusting itself to suit pandemic conditions. The company has also been busy acquiring other firms to expand its product offerings and global presence. I will discuss the tech stock growing at the speed of light and why it might be worth buying, despite being near its all-time high valuation today.
One of the primary growth drivers for the tech firm has been its mergers and acquisitions strategy. Over the course of a year, the company has acquired three smaller but valuable firms, including Vend, Upserve, and ShopKeep. These acquisitions have added more to what Lightspeed has to offer to its customers, improving its product offerings, and increasing its overall customer base.
Vend is a cloud-based retail management company, Upserve is a restaurant cloud software company, and ShopKeep is a cloud service platform provider. The combination of these companies has synergized with Lightspeed by improving its presence in the retail and restaurant industry while giving it an edge in its cloud-based services.
Stellar revenue growth
Another impressive thing going for Lightspeed is its ability to grow its revenues consistently. In the most recent quarter, Lightspeed Commerce posted a record revenue growth rate of 220% year over year. The company is not simply offering growing revenues. Its revenues are growing at an accelerated pace. It means that the stock could easily become worth far more than it is today within a matter of weeks.
The overall trend in the global tech sector that has offerings similar to Lightspeed also indicates a positive picture for the Canadian company. Payments companies are posting impressive results on a consistent basis due to the growing e-commerce industry. While the growth of its competitors does not necessarily mean that Lightspeed will also grow, it shows that the industry has plenty of room to facilitate its growth.
The tech industry fared well throughout 2020, and it has been enjoying a strong run in the second half of 2021 so far. As the e-commerce industry continues to boom, Lightspeed’s acquisitions have made it a powerhouse in the industry worldwide.
If you are interested in investing in the stock, you should know that short-term difficulties might cause a decline in its share prices, but it seems well positioned to deliver stellar long-term shareholder returns.
Our team of diligent analysts at Motley Fool Stock Advisor Canada has identified one little-known public company founded right here in Canada that’s at the cutting-edge of the space industry and recently completed a transformational acquisition, all while making a handsome profit in the process!
The best part is that in a market where many stocks are selling at all-time-highs, this stock is trading at what looks like a VERY reasonable valuation… for now.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Lightspeed POS Inc.