Lightspeed Commerce Inc (LSPD.TO)

For sure a spec stock, but trades at a fraction to Shopify. This has come down a lot. he sees revenue growth around 30%. This year they're streamlining and refocusing product, overall improving. Risk/reward basis, you can buy this. Their forecast is deliberately conservative.

He bought it a few years ago but hasn't paid much attention to it in the past year and a half. It has been criticized for sending out mixed messages. He met with them in Montreal a while ago and was impressed, so is taking another look at it. Lightspeed reports on May 18.

Did well during the pandemic. Have bought a lot of companies, but they meant no profits or cash at LSPD. The company is re-focusing now. Seeing churn in customer base, so they're seeking bigger customers but this will take time. 

No pulse yet. Not bounced off the lows. Fundamentals of the business are tough. E-commerce has slowed down dramatically. Revenue growth has slowed down. New management team. SHOP is more interesting to him.

Parabolic during pandemic. Mighty fall from grace. Better ways to capitalize on secular growth of payment solutions. Not profitable, no real earnings or cashflow. Not what you want in a slowing economy.

Not a good short term hold.
Payment systems tech getting lots of attention.
Recent tech sector pullback has driven shares lower. 
Company not earnings positive yet.
Waiting until company is profitable before buying.

Last week for the first time in quite a while, some info tech names showed up on relative strength. See his Top Picks. Be quick to limit risk near recent lows of the last week or two. Signs of a positive shift, especially in the US, towards info tech. Still, given higher rates and the sensitivity in the economy, he still favours financials, industrials, and materials.

Company unable to generate profits.
IPO sold at very high price.
Shares have sold off considerably. 
Not a good time to buy shares.

Neither fits his criteria. Hasn't shown ability to produce consistently high ROIC. LSPD still losing money. NVEI's PE ratio is in the 70-90 range. Neither has the proven business model he's looking for; you can lump in DND, SHOP and DCBO too. No track record. Relying on large and lumpy acquisitions, many done at nosebleed valuations. Relies on debt to fuel acquisitions.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strong revenue growth rates. Unique position in the hospitality Point of Sale industry. Potential for future acquisitions. Valuation has become reasonable. Unlock Premium - Try 5i Free