![]() It is yet to become sticky among restaurants as it saw a high churn rate in that sector last year. It has just recently become a sticky platform that retailers want. Lightspeed still has many feats to achieve until it gains the market share and scale to generate profits. But even Shopify didn’t make any profit until last year. So far, Lightspeed has managed to accelerate its growth organically and through acquisitions, while maintaining a healthy balance sheet. Once it acquires the company, it gradually pushes the Lightspeed platform and cross-sells other products to increase its average revenue per user. Lightspeed generally eyes well-performing cloud-based point of sale (POS) companies whose business model is in sync with Lightspeed. ![]() Geographic expansion like Gastrofix and Upserve Lightspeed has a three-pronged acquisition strategy: SMBs is a fragmented market, and the only way to capture it is through acquisitions. Dax Dasilva stated that the company is not targeting large enterprises, which demand custom platforms. It is looking to push its platform that can give enterprise-level solutions to mom-and-pop stores. Lightspeed is targeting small and mid-size businesses (SMBs) and new entrants in the retail and hospitality industry. He even said that Lightspeed has now become “the acquirer of choice.” Now, what does it mean? ![]() When I interviewed Lightspeed CEO Dax Dasilva after the fiscal 2021 third-quarter earnings, he hinted that they were in ongoing acquisition talks with many companies. Story continues Lightspeed: “The acquirer of choice” It is no doubt that Lightspeed will use the $676 million in new equity capital to acquire more companies as it aims to become the global omnichannel platform for the retail and hospitality sector. The stock more than doubled since then, even when the second wave of the pandemic reduced hospitality revenue. The stock jumped in November when it announced the ShopKeep acquisition. If you look at Lightspeed’s stock price momentum, the stock fell 16% in September and hovered around that price till October. It used US$268 million of the new capital to buy ShopKeep and Upserve, which nearly doubled its revenue. To understand the catapult effect, let’s go back to September 2020, when Lightspeed started trading on the New York Stock Exchange, raising US$397.7 million in an initial public offering (IPO). What will drive Lightspeed stock price in 2021? The pullback acts like a catapult and drives the stock price momentum. It is common for stocks to correct, as new share issue dilutes the interest of existing shareholders.īut the math works differently for high-growth stocks like Lightspeed. On February 12, it raised US$676.2 million in a public offering, which it will use to pursue growth strategies. The stock is seeing a temporary correction because the company announced an equity offering for the second time in six months. Even if I exclude the pandemic impact, the stock surged 97% between March and December 2019. ![]() In these two years, it has grown fourfold. It started trading on the Toronto Stock Exchange in March 2019 and will complete two years of trading this March. Lightspeed is relatively new in the stock market. Hence, keep a watch on the stock and buy when it falls below the $86 price. But this correction is temporary, and the stock could see another round of rally in 2021. The stock could see a further correction to around $80-$85 in the coming weeks as investors cash out some profits. Lightspeed POS (TSX:LSPD)(NYSE:LSPD) stock recently saw a sharp correction, falling 13% so far this week to below $90.
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